We have had a flurry of enquiries recently at GETS HQ from people who’ve had a letter from HMRC asking them if there’s any information they think they should be telling the taxman. With a heading of ‘Your overseas assets, income or gains’ it opens by saying that they have information that you may have these things, and want to help make sure you are paying the right UK tax on this.
Rather than litigate, the letter is an invitation to sign up for the Worldwide Disclosure Facility (‘WDF’), which is designed to allow taxpayers to correct omissions and errors without commencing a criminal process. However, specialist advice is still advisable, as the WDF is a one-time chance to put things right, and making a correction that isn’t complete may be storing up problems for later.
The letter gives one month for the individual to reply, but that’s not actually a month to resolve it all. It’s actually a month to decide whether to sign up for the WDF, which in turn then gives the taxpayer a further 90 days to pull together the information, and make a full disclosure to HMRC, along with a calculation of tax due. There will likely be interest and penalties if tax is due and hasn’t been paid on time, but those are lower under WDF than if it hasn’t been used.
In certain cases, such as if a taxpayer is in fact non-domiciled, some of that income may in fact not be UK taxable anyway. Or, it may be covered by a personal allowance or savings allowance.
So, the key thing to do is to give us a call, have a chat about what you believe their information is likely to be, whether it’s a forgotten foreign bank account from a previous assignment, or some dividends on shares you’ve forgotten you had. And, a lot of people are getting them at the moment, so it’s a good time to put things in order when HMRC are in the mood for it!
