HMRC has announced a new tax disclosure facility

HMRC has announced a new tax disclosure facility for anyone who has UK tax liabilities and overseas financial interests.

The Worldwide Disclosure Facility (WDF) is set to open on 5th September 2016 as an opportunity for individuals with overseas financial assets to bring their UK tax affairs up to date and make a voluntary disclosure of previously undeclared income or gains from overseas financial interests.

The timing of the WDF is key for HMRC, as from October, it will have access to new information about bank accounts and investments held overseas by UK taxpayers in over 100 countries.

The sharing of information between financial institutions and HMRC will be seen as a game changer as HMRC looks to take a tough stance on those who have undeclared income and financial gains from overseas investments and bank accounts.

If HMRC begins a tax investigation and is successful in proving that tax evasion has occurred, the individual will have to repay the amount of tax owed in full, pay a fine as much as twice the amount of tax owed, and in extreme cases, face criminal prosecution.

The Worldwide Disclosure Facility offers individuals an opportunity to bring their tax affairs up to date. It replaces previous offshore disclosure facilities such as the Liechtenstein Disclosure Facility (LDF) and British Crown Disclosure Facilities (Isle of Man, Guernsey and Jersey).

However, unlike the Liechtenstein and British Crown Disclosure Facilities, the WDF does not offer favourable terms, such as a reduced financial penalty, or immunity from criminal prosecution.

This is the next aggressive phase in HMRC’s plan to reduce the tax deficit in the UK. It believes that since 2010, £2.5bn has been recovered from offshore tax avoidance.

In addition to access to offshore financial information made available from October, HMRC will next year benefit from even more taxpayer data through the global common reporting standard.

For more information about the Worldwide Disclosure Facility (WDF) or if you have bank accounts, investments and assets overseas and would like to discuss your circumstances in complete confidence, call us on 0113 387 5670 or fill out an Enquiry Form and we will contact you directly.