If you want to make a voluntary disclosure
In the majority of cases, an online notification is made to HMRC informing them of an intention to make a disclosure under the Digital Disclosure Service (DDS).
On receiving a letter that the taxpayer agrees to enter into the DDS HMRC allow 90 days for the taxpayer, or their advisor, to calculate the tax, interest and potential penalties due. Our approach is to also prepare accounts and submit a separate disclosure letter to HMRC to explain the background and make representations on the taxpayer’s behalf.
The tax calculations can potentially go back up to 20 years depending on the circumstances. The nature of the underlying “tax offence, will determine how many years to include in the disclosure and we advise of the penalty % that should be applied. HMRC then review this and once accepted payment is due. It is possible to discuss time to pay.
What happens if you do nothing?
If you need to make a disclosure and choose not to , then you can expect HMRC to open an enquiry into your tax affairs as the information will be provided by the on line platform as mentioned in a our blog here. The downsides of this approach include:
- Not retaining control over the HMRC investigation and facing uncertainty that can last many months or years.
- Higher financial penalties.
- The risk that HMRC will start focusing on other aspects of your tax affairs, even if there are no other issues to disclose and the ensuing stress
- Additional professional fees
