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Should I Make A Disclosure To HMRC?

Yes! As soon as you can ...

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Posted by Helen Beaumont on 12/02/2020 @ 8:00AM

A number of people have approached me recently, to help them with making a disclosure to HMRC. They didn't realise that overseas income needed to be disclosed because it is taxed offshore ...

It is always a good idea to make a disclosure to HMRC, but you'll probably need my help!

It is always a good idea to make a disclosure to HMRC, but you'll probably need my help!

copyright: fizkes / 123rf

The assumption is that HMRC's computer systems identify any mistake, so these individuals believe that they'd be told if their tax return was incomplete and an oversight such as profit from oversees assets would mean a nudge.

"However, it would actually result in a penalty!"

HMRC Connect is really good at absorbing data from lots of sources, and new connections are being added all the time, but it doesn't know everything. When income is generated offshore, it can take time to catch up, leaving tax returns incorrect or incomplete.

If you tell HMRC voluntarily, rather than waiting for them to approach you, this is called 'making a voluntary disclosure', and it is most definitely worth doing.

Voluntary disclosures can be made in a number of ways. The Digital Disclosure Service allows you to do it over the web. You notify HMRC that you want to make a disclosure, they confirm a registration number with you, you tell them why the information was omitted, then you calculate the tax, interest and penalties that are due. You then pay the underpaid tax on submission of the disclosure, unless you need time to pay.

Be aware, however, that if you deliberately failed to pay the right amount of tax in the past, you can file a Code of Practice 9 as part of the Contractual Disclosure Facility which will protect you from a potential criminal investigation!

HMRC will probably ask you to complete other forms to disclose the bank accounts, assets and liabilities you had on a particular date and certify that you have disclosed everything to them and you are correcting and bringing up to date what you owe.

"Penalties could be charged for mistakes or omissions due to careless or deliberate action!"

These could be up to 100% of the tax you own for UK tax issues or up to 300% for offshore. The maximum penalty you could receive for failing to disclose under the Requirement to Correct without a reasonable excuse is 150% of the tax due, reduced to 100% for voluntary disclosure.

I would encourage anyone that has undeclared income to make a voluntary disclosure as soon as possible. There is always that person that thinks they'll never be found out, but HMRC gets information from all sorts of different sources, with new ones being added all the time, so is it really worth taking the risk?

By making a voluntary disclosure, you will pay a much-reduced penalty.

Until next time ...



Would you like to know more?

If anything I've written in this blog post resonates with you and you'd like to discover more, it may be a great idea to give me a call on 01908 774323 and let's see how I can help you.

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About Helen Beaumont ...


Helen brings the personal tax planning experience of the top 20 tax companies to Essendon. Formerly of MacIntyre Hudson (with 45 offices nationwide), Helen worked at Chancery for more than 10 years before joining Essendon as the personal tax specialist.

Tax Planning can make a considerable difference to your tax liability. Helen has specialist knowledge and experience in tax planning and uses every opportunity to minimise your tax bill is utilised. By analysing your investments, income, profit and expenditures, Helen will provide strategic tax planning expertise that could offer significant savings, whilst delivering clear, honest advice and guidance.

When Helen is not at Essendon she spends time with her young son and likes going on long walks with the family dog.