Worldwide Disclosure Facility
The Worldwide Disclosure Facility (WDF) is a mechanism for disclosing previously undeclared offshore income and gains to HMRC
Unreported offshore income and gains can be disclosed through the WDF
It is imperative that you ensure you have correctly reported any income and gains in respect of offshore assets and paid all appropriate UK tax, or you could suffer severe penalties from HMRC.
It is a two-step process, whereby an initial notification of intention to make a disclosure is made to HMRC.
HMRC will then issue a disclosure reference number, which triggers the start of a 90-day window to submit the disclosure and pay the tax, interest and penalty determined as due.
Although this seems simple, there are a lot of variables that need to be considered when deciding how much of a penalty to offer and how many years to disclose. For this reason, it is essential to get professional advice.
Why you should use the Worldwide Disclosure Facility
The Worldwide Disclosure Facility is a formal settlement process that allows taxpayers and their advisors to make a full disclosure of tax irregularities involving, partly or wholly “offshore matters” by making an offer of tax, interest and penalties in full and final settlement of the historic issues. HMRC will view engagement with the Worldwide Disclosure Facility as a sign of co-operation which will help the disclosure progress more efficiently and ultimately resolve previous understatements by contract settlement.
It is also possible to make a voluntary disclosure via the Worldwide Disclosure Facility if you realise that you have unresolved offshore tax issues before HMRC gets in touch. Coming forward voluntarily before HMRC opens an investigation will put you in a more favourable position, and you will be exposed to lower tax-geared penalties.
The Worldwide Disclosure Facility is available to individuals, companies or Trustees with offshore tax issues to disclose. Please contact Crowe's Tax Resolutions team if you would like to discuss how we can help you.
Why you need to review your tax position
Increasingly complex and constantly changing UK tax legislation
Common misconception
Many people believe income and gains that are earned and taxed overseas are not taxable in the UK. This is not always correct.
Offshore matters
The rules concerning offshore matters have changed substantially, catching many taxpayers out. We still see cases where non-doms are not aware the remittance basis rules changed many years ago.
Many people believe income and gains that are earned and taxed overseas are not taxable in the UK. This is not always correct.
The rules concerning offshore matters have changed substantially, catching many taxpayers out. We still see cases where non-doms are not aware the remittance basis rules changed many years ago.
Anti-avoidance measures
Numerous anti-avoidance measures have been introduced, aimed at offshore Trust structures and overseas property structures. Structures that were previously tax compliant may therefore have unidentified issues to resolve.
Third parties
Taxpayers may be inadvertently affected by unknown issues created by third parties, for example, changes to complex Trust rules that have not yet been appreciated.
Numerous anti-avoidance measures have been introduced, aimed at offshore Trust structures and overseas property structures. Structures that were previously tax compliant may therefore have unidentified issues to resolve.
Taxpayers may be inadvertently affected by unknown issues created by third parties, for example, changes to complex Trust rules that have not yet been appreciated.
Reputational risk
You could be at risk of reputational damage from HMRC’s ‘Name and Shame’ powers.
Defaulters' regime
Your future tax compliance could be monitored under the 'Managing Serious Defaulters' regime.
You could be at risk of reputational damage from HMRC’s ‘Name and Shame’ powers.
Your future tax compliance could be monitored under the 'Managing Serious Defaulters' regime.
How Crowe can help
Our Tax Resolutions specialists will support you throughout every stage of the disclosure process. We have worked with numerous taxpayers and their advisors to bring historic tax issues up-to-date. If you choose to work with us, you can expect that we will:
- act as a buffer between you and HMRC so that you do not need to speak directly with HMRC
- review the background of your case and identify all issues that need to be disclosed
- advise on the most appropriate steps to ensure a full disclosure is made to HMRC to reduce the possibility of HMRC asking follow up questions
- calculate the underpaid tax whilst ensuring all legitimate claims for tax reliefs / allowances are considered
- advise you on the likely penalty position and consider all mitigating factors to reduce penalties as low as possible
- liaise with third parties to obtain the data that is relevant to your disclosure
- ensure that HMRC does not overstep the mark, for example, by making requests for data that HMRC is not entitled to.
Our team is approachable, professional and provides a discreet and comprehensive service.
Book a free consultation
If you would prefer to speak to us, please call our free confidential helpline +44 (0)800 656 9990.
We're here to help
Our experienced and award-winning Tax Resolutions team can help you navigate the WDF process and ensure you meet your obligations.
Partner, Tax Resolutions
Partner, Head of Tax Resolutions