Worldwide Disclosure Facility WDF

If a person is contacted by or receives a letter from Worldwide Disclosure Facility about the overseas assets, there is a high chance that they have information about it and the owner of those offshore assets has not disclosed them. It is advised to refer to a Tax Investigator immediately for HMRC tax investigation procedure London.

The Worldwide Disclosure Facility was initiated by HMRC in September 2016. The Worldwide Disclosure Facility provides the residents of the UK to legalize and settle their tax issues and helps people do declaration of trust rental income HMRC voluntarily. The HMRC receives information from about 100 countries under the Common Reporting Standard agreement. The HMRC traces and detect the offshore incomes through information provided by Common Reporting Standard CRS. The taxpayers were required to make declaration of trust rental income HMRC by September 30, 2018, using Requirement to Correct introduced by HMRC. In case of any failure to meet this deadline will result in Failure to Correct (FTC). Any submission after September 30th, 2018, would result in a tougher Failure to Correct penalty. The minimum penalty is 100% and the maximum penalty is 200% of underpaid taxes.

The Worldwide Disclosure Facility and the HMRC tax investigation procedure in London lets any resident from the UK disclose a tax liability including:

  • Income made from sources outside the UK.
  • Activities carried out outside the UK.
  • Assets held outside the UK.
  • Funds transferred outside the UK.

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    Penalties

    The disclosure of assets/ income after 1st October 2018 will have minimum penalties with respect to Requirement to Correct (RTC). The Failure to Correct (FTC) usually applies a 200% penalty on the unpaid tax if the disclosure is unprompted. However, this penalty can be negotiated to 150% depending upon the quality and accuracy of disclosure. These can further be negotiated to 100% depending again on the quality and accuracy of disclosure. FTC will no longer observe to all years and there are complicated policies for figuring out what number of years can be assessed and the rates of penalty chargeable. Inaccurate or incorrect disclosure may also result in a civil intervention or criminal prosecution. Therefore, it is important to consult advice from specialists with experience in dealing with such cases.

    The Tax Inspector can support in 5 reasons through the Worldwide Disclosure Facility process:

    1. Failure to Correct Penalties:

    HMRC charges a 200% penalty in WDF cases. Cooperation and help with professionals in seeking advice for full disclosure with HMRC will help to reduce the penalty charges.

    2. No immunity from Prosecution:

    The process provides no immunity for the assets or incomes from criminal means. Tax evasion is a criminal offense. Seeking advice from a professional advisor who handles regular deals with disclosures to HMRC can assist to assess the risks in a particular case. An appropriate process must be chosen for the significant risks.

    3. Time Limits and behavior:

    The UK legislation includes 3 types of behavior:

    • Innocent
    • Careless
    • Deliberate

    These behaviours refer to time limitations to charge the taxes for either four, six, or twenty years. Some of the charges are for twelve years related to offshore matters. The number of years is associated with your self-assessment.

    4. Tax treaties & Foreign Tax Credits:

    This helps the person if he/she has paid taxes outside the UK and is entitled to a credit to reduce any further taxes liability through Worldwide Disclosure Facility. This would require an evaluation of tax treaty preparations among the countries and calculation of Foreign Tax Credits.

    5. Reporting foreign investments in the UK:

    This is an extremely complex task, and it requires professional insights. Currency exchanges, UK tax year, the situs of assets/ offshore income, and capital profits all add to the complexity.

    Other Formalities

    To file a disclosure about the offshore assets/ incomes, the person must be

    • Eligible to file.
    • Make a complete disclosure about previous undisclosed UK tax liabilities.
    • Calculate penalties and interest base on the current legislation.

    However, if the person cooperates fully with the HMRC, he/ she will not be imposed higher penalties and the details will not be published online which could save him/ her from spoiling their reputation.

    Failure to disclose an offshore asset/ income will result in applying a higher penalty by HMRC, open a civil or criminal investigation and the details will be published online harming the person’s reputation.

    How IBISS & CO can help with the disclosure

    IBISS & CO has an experienced team of Chartered Tax Advisers (CTA) with a prime goal, to provide all our clients with affordable tax-saving solutions and minimise penalties.

    IBISS and CO have special authorizations and specializations in WDF disclosures and have assisted large number of clients in making disclosures through WDF. All disputes or disclosures about the offshore assets and incomes submitted by IBISS and CO are accepted by HMRC and have vast knowledge and proficiency to minimise the liabilities or penalties held onto clients. The team comprises Ex-HMRC tax inspectors and Chartered tax advisors who are exceptionally experienced and recognizable with this process.

    The team has tax experts and can guide and counsel clients to raise any technical complications which may impact the disclosures such as domicile or residence status because these are mandatory to disclose.

    The disclosure must consist of the declaration of all the assets and incomes held outside the UK in past five years. The declaration must include personal goods such as jewellery, investments, lands, cars, cash. The payment must be made after the declaration. Churchill Tax Investigation can help with a time-to-pay agreement if required.

    In summary, IBISS and CO do the following:

    • Take responsibility of the disclosure process
    • Advise the clients on best possible solutions for disclosure
    • Communicate with client’s accountants (if necessary)
    • Communicate with HMRC
    • File the disclosure report

    Agree on the amount payable with HMRC including penalties.

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