WORLDWIDE DISCLOSURE FACILITY

HMRC is currently contacting individuals who may have unreported overseas income or gains. It is crucial that all foreign income or gains are accurately reflected in tax returns, as HMRC's Connect system is highly sophisticated and can identify discrepancies by cross-referencing financial data from various sources. Ensuring full compliance with tax reporting requirements helps avoid penalties or further investigations.

The HMRC Overseas Disclosure facility allows UK taxpayers to voluntarily report and correct any undeclared offshore income, gains, or assets. This process, through the Worldwide Disclosure Facility (WDF), helps individuals and businesses rectify underreported tax liabilities.

To make a disclosure, taxpayers must notify HMRC, then submit relevant details within 90 days, including unpaid tax, interest, and penalties. Disclosing voluntarily can reduce penalties and avoid prosecution, especially as international data sharing through the Common Reporting Standard (CRS) makes offshore tax issues easier for HMRC to detect.

Those with undeclared foreign income, investments, or properties should consider disclosure. Penalties for non-compliance can be severe, up to 200% of the unpaid tax. The Failure to Correct (FTC) Penalty applies if offshore tax liabilities remain undeclared after HMRC’s contact. In cases of genuine errors, penalties may be red

Syedain & Co can assist clients who have received letters from HMRC regarding unreported overseas income or gains. They can help address any issues raised and ensure tax affairs are in order. Additionally, Syedain & Co can help clients take proactive steps to prevent receiving such letters by ensuring proper reporting and compliance, thereby avoiding potential complications with HMRC. Professional advice is recommended for these complex situations.

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