Voluntary Disclosures

Voluntary Disclosures

Disclosing tax issues to HMRC voluntarily is always preferable to waiting for an enquiry or investigation to be opened. The penalties for getting it wrong can be severe, but coming forward unprompted (when HMRC have not contacted you, and you don’t have any reason to believe that HMRC have discovered, or are about to discover, the problem) can significantly reduce the level of penalty that HMRC seek to charge. Equally importantly, approaching HMRC voluntarily can impact on their approach in the subsequent investigation. However, it’s essential to carefully consider the available options before making a disclosure.

HMRC views voluntary disclosures favourably, particularly where they are made unprompted (where there is not an existing tax enquiry, or the taxpayer does not have reason to believe that an enquiry is likely). In serious cases, making a disclosure can mean the difference between only being charged a financial penalty (in addition to the unpaid tax, and interest) or a criminal prosecution. In other cases, it can lead to a reduction in the financial penalties imposed as part of the final settlement.

Specialist advice should always be sought before contacting HMRC, as approaching them incorrectly could have serious consequences, including the risk of a criminal investigation.