HMRC Enquiries & Voluntary Disclosures
Do you have previously unreported income or gains? Are you subject to an HMRC enquiry?
The PD Tax team understand that corresponding with HMRC can be daunting and have helped many clients deal with tax investigations and disclosures.
HMRC continues to crack down on tax non-compliance, and with increased resources for gathering information from different states and financial institutions it is important that enquiries and disclosures are dealt with promptly and in a professional manner.
Where you have previously unreported income or gains and are keen to settle your tax affairs, we can provide advice regarding the most appropriate avenue for pro-active disclosure, consider whether a disclosure can be made under one of HMRC’s targeted campaigns, prepare the relevant documentation, and negotiate with HMRC in order to secure the best possible result for you.
There are currently two HMRC campaigns targeted at a specific taxpayer group or type of activity:
- Let Property Campaign – aimed at landlords with undisclosed rental income
- Card Transaction Programme – aimed at businesses who accept credit or debit card payments but have not registered with HMRC and/or have failed to declare all income.
If a disclosure does not fall within one of the above campaigns, a disclosure can be made under the Digital Disclosure Service, or under the Worldwide Disclosure Facility for offshore tax issues.
If HMRC have enquired into your tax affairs, we can support you throughout the process and liaise with them on your behalf to ensure that any misunderstandings are resolved and that your best interests are protected.
We have dealt with enquiries in the full range of taxes, including enquiries through:
- Specialist Investigations
- HMRC Local Compliance
- Code of Practice 9
- Code of Practice 8
- Offshore Coordination Unit
Testimonial provided by Ms Y in September 2015
Vikki was a tremendous asset to me in sorting out my tax affairs. Her excellent advice helped me to make a complicated situation straightforward. I would recommend her to anyone.
Testimonial provided by Ms C in October 2013
I just wanted to say how delighted I am with the outcome of your communication with HMRC on my behalf.
Where I would have struggled to say the right thing to the right departments, you knew exactly who to contact and how to approach them regarding this rather unusual partnership tax situation.
It’s a great relief to have it all resolved (in my favour!) and I won’t hesitate to use PD Tax Consultants again
Disclosure of Offshore Income & Gains
Our client had undisclosed income and gains from a Swiss bank account and wanted to bring his tax affairs up to date whilst ensuring that the tax was calculated correctly and penalties minimised.
We provided advice and illustrative computations comparing the Swiss Tax Treaty with the Liechtenstein Disclosure Facility (LDF) and a voluntary disclosure to HMRC.
HMRC accepted our disclosure and the calculations of tax, interest and penalties without amendment.
Our client came to us as they had been advised by their overseas bank that it was likely they should be paying UK tax on their foreign pension income.
The client was unsure how to calculate his UK tax liability, or which years needed to be accounted for.
We provided our client with advice which set out:
- The amount of his UK tax liabilities on the foreign income. As part of this work we converted the foreign income into sterling using the appropriate exchange rates and identified that only 90% of foreign pension income received was chargeable to UK tax.
- Provided advice regarding which years were required to be disclosed to HMRC. In this case the taxpayer had received some inaccurate advice which may have limited the number of years that HMRC could assess to 4 tax years, however in practice this point was not tested because whilst reviewing the taxpayer’s bank statements we discovered that our client had paid the one-off levy under the UK-Swiss Cooperation agreement, the effect of which was to regularise his tax position up to 2013 thus restricting the number of years for which a disclosure was required.
- How the tax liabilities should be dealt with. We advised that 2016/17 and 2015/16 were in time to be included on tax returns, whereas for earlier years a voluntary disclosure would be required and that the Worldwide Disclosure Facility (WDF) would be a suitable mechanism for the disclosure.
Once the client reviewed our advice and figures, we made the appropriate notifications to HMRC and subsequently submitted the tax returns and disclosure.
The tax returns and disclosure report and accompanying calculations were accepted by HMRC, thereby giving our client the peace of mind that their compliance obligations had been met and that their tax affairs were in order.
The client was a member of a defined benefits pension scheme and the growth in their pension rights in 2015/16 exceeded their annual allowance for that tax year.
The excess growth gave rise to an income tax charge (aka an “Annual Allowance Charge”) which was overdue and needed to be disclosed to HMRC.
We immediately registered our client with HMRC’s appropriate disclosure facility to minimise the potential penalties payable.
We then provided our client with calculations showing the potential income tax, interest, and penalties payable, explaining how these would be disclosed to HMRC and providing instructions on how to pay the amounts due.
After our client fully understood the position, we prepared a full disclosure to HMRC explaining how the Annual Allowance Charge arose and why the minimum possible penalties should apply given our client’s mitigating circumstances.
Following the submission, we kept in regular contact with HMRC’s disclosure team to ensure our client’s disclosure was being processed correctly.
HMRC accepted the disclosure in full and imposed no penalties on our client.
The final amounts payable only included the income tax from the Annual Allowance Charge and late payment interest.
The client was very satisfied with the outcome!