Voluntary disclosures which do not fall under the ‘serious’ category are now administered through HMRC’s online portal, called the Digital Disclosure Service (DDS).
What is the purpose of the Digital Disclosure Service (DDS)?
Encourage Taxpayers to correct errors
HMRC regularly run campaigns aimed at encouraging taxpayers to correct errors in their tax affairs and often do so by targeting specific groups of taxpayers. For example, UK resident taxpayers with undisclosed offshore income and gains, or landlords with undisclosed property income.
Specific routes to facilitate a disclosure for these groups of taxpayers exist and are known as the Worldwide Disclosure Facility (WDF) and Let Property Campaign (LPC) respectively. Both types of specific disclosure facilities are administered under the DDS.
The DDS also allows taxpayers to bring their tax affairs up to date regardless of how the errors or omissions arose or what the underlying income or gains relate to.
Making a voluntary disclosure
All disclosures made through the DDS follow the same process starting with an initial online registration to disclose. Once a registration has been made to HMRC the taxpayer has 90 days to submit their disclosure including a calculation of the total tax, interest and penalties due in accordance with UK tax legislation. Menzies approach is to provide additional evidence to support the disclosure as is appropriate in the circumstances as this will reduce the risk of HMRC challenging the basis of disclosure.
In all circumstances it is preferable to make a voluntary disclosure rather than wait for HMRC to initiate an investigation. By coming forward voluntarily you will potentially benefit from lower penalties and with our assistance retain greater control over the process.
HMRC Nudge Letters
In recent years HMRC has made increasing use of nudge letters that are driven off the data and information they receive relating to UK taxpayers. The purpose of these prompts is to encourage taxpayers to review their tax affairs and where necessary make a voluntary disclosure.
Menzies experts have dealt with all types of voluntary disclosure cases and are happy to talk to anyone for a free, no obligation discussion to ascertain whether a voluntary disclosure is necessary and if it is, the most appropriate route.