The UK government has tasked HM Revenue and Customs (HMRC) with significantly expanding its tax investigations over the coming months. With greater resources and political backing from the Labour government to close tax gaps, HMRC is likely to intensify its scrutiny of taxpayers, particularly those with overseas assets or income. If you suspect or know that your tax affairs might not be fully up-to-date, now is the ideal time to proactively address the issue.
What is the Worldwide Disclosure Facility (WDF)?
The Worldwide Disclosure Facility (WDF) enables UK taxpayers to voluntarily disclose unpaid taxes linked to overseas assets or income. It’s specifically designed for people who have tax liabilities due to offshore activities, helping them become compliant and potentially avoid harsher penalties and legal action.
By voluntarily coming forward under the WDF, you demonstrate to HMRC that you’re taking your tax responsibilities seriously, which can significantly affect how penalties are applied.
Why act now?
HMRC is actively investing in new data analytics tools, additional staff, and information-sharing agreements with international tax authorities. This increased capability means it is increasingly likely that HMRC will discover tax irregularities. Waiting for HMRC to approach you could result in significantly higher penalties or even criminal prosecution.
Acting now allows you to remain in control of the disclosure process and achieve greater certainty about your financial and legal situation.
Illustrative scenarios
Consider, for instance, a UK resident who has inherited a bank account abroad but has not declared the interest earned. Even small undeclared amounts can lead to HMRC investigations with disproportionately heavy penalties if discovered later. By voluntarily disclosing this under the WDF, penalties could be substantially reduced.
Or perhaps you have been renting out an overseas property without reporting the rental income in your UK tax returns. Under the WDF, you can proactively rectify this oversight and mitigate potential legal consequences.
How Gravita can support you through the WDF
The process of making a voluntary disclosure through the WDF can feel overwhelming, particularly if you’re not familiar with HMRC procedures. Gravita’s specialist tax team can provide expert guidance throughout this process, helping you to:
- Conduct a comprehensive review of your tax affairs to identify any liabilities
- Prepare accurate and thorough disclosure reports for HMRC
- Handle all communication with HMRC, ensuring clarity and transparency
- Negotiate fair and appropriate outcomes, aiming for reduced penalties where applicable
Next steps: arrange a consultation
With HMRC stepping up investigations, addressing your tax compliance proactively is more important than ever. Gravita’s experienced team is ready to support you with confidential, tailored advice and practical assistance.
Contact Tax Partner, Dion Laycock today to arrange a confidential consultation and discuss your circumstances. We’ll help ensure your tax affairs are fully compliant, providing peace of mind in an increasingly regulated landscape.
