Worldwide Disclosure Facility (WDF)
Lisa Casey - February 16th, 2018
The Worldwide Disclosure Facility (WDF) is available for anyone who wishes to disclose matters relating to offshore territories which has resulted in tax liabilities not having been declared or paid to HMRC. Examples would include income assets held and activities carried on wholly or mainly in territories outside of the UK.
Following the closure of HMRC’s offshore disclosure facilities in December 2015, there is a limited window of time for anyone to offer disclosure to HMRC. After September 2018 information will be automatically shared between over 100 countries under the new Common Reporting Standard (CRS) and HMRC will have full access to this.
HMRC are taking a more lenient approach where information is offered to them before this time but thereafter treatment will be much more strict and penalties are expected to increase dramatically to between 100% and 200% of the tax liability which should have been due. HMRC’s usual approach to penalties will be applied, taking into account ‘behaviour’ (for example careless errors would carry a lower penalty than intentional and concealed inaccuracies).
Asset based penalties may also apply of up to 10% of the value of the asset(s) in question as well as ‘naming and shaming’ of taxpayers.
It is a legal requirement for disclosure in respect of any Tax Returns affected by this obligation to be corrected before 30 September 2018 regardless of whether or not any omission or understatement was intentional. After this time HMRC will have access to the information in any case.
If you are in any doubt whether you may be affected by this and think you may need to make a disclosure please do get in touch so that we can consider whether disclosure is needed.