What is a voluntary disclosure?
A voluntary disclosure to HMRC refers to the process where individuals or businesses proactively inform HMRC about any errors, omissions, or underpayments in their tax affairs before HMRC identifies them. This can include undeclared income, unpaid taxes or incorrect tax returns or any other discrepancies. By making voluntary disclosure, taxpayers can often benefit from reduced penalties and avoid more serious consequences such as investigations or legal action.
Why you should consider making a voluntary disclosure?
Making a voluntary disclosure can help you rectify tax issues before they escalate into serious legal or financial consequences. If any of the following situations apply to you, taking proactive steps to disclose the relevant information to the tax authorities can minimise penalties, reduce interest charges and demonstrate your willingness to comply with tax regulations.
Undeclared income or gains
If you have received income that you have not reported to the tax authorities, it is essential to disclose it. This may include:
- Rental income: earnings from renting out a property, whether residential, commercial, or short term income.
- Self-employment or freelance earnings: Income from side businesses, consulting work, or gig economy jobs that were not declared on a tax return.
- Investment gains: profits from selling shares, cryptocurrencies or other assets that are subject to capital gains tax.
- Foreign income: this includes any earnings from overseas employment.
How to make a voluntary disclosure to HMRC
Making an HMRC disclosure involves several steps. Firstly, you should first gather all relevant financial records and determine the extent of any unpaid tax. Next, notify HMRC of your intention to disclosure, usually through the Digital Disclosure Service or another relevant disclosure facility. Once acknowledged, submit a full and accurate disclosure, including details of undeclared income, tax owed and any penalties due. Finally, arrange to pay the outstanding amount promptly to minimise penalties and interest.
How can we help
Getting specialist tax advice from the beginning is essential if you want to reach your desired outcome. Our dedicated tax dispute team will work with you to disclose the tax paid late, interest and any penalties that are due. We’ll provide HMRC with all the necessary information to check that the disclosure is complete and accurate.
We can handle the whole process on your behalf, We’ll work with you to disclose the taxes paid late, interest, and any penalties that are due. And we’ll provide HMRC with all the necessary information to check that the disclosure is complete and accurate. Our aim is to get your voluntary disclosure resolved as quickly and effectively as possible.
Taxpayers who make such a disclosure are looked on favourably by HMRC, who offers considerable beneficial terms to those doing so.
If you would like to talk to us about making a voluntary disclosure to HMRC, don’t hesitate to get in touch with team lead, John Hood.
