If you received a HMRC letter about your money or assets abroad and after having checked your tax affairs you find that you need to make a disclosure – you will need to use this facility.
Step 1 – Where possible, contact HMRC. They may give you more information about the assets in question, which will help focus the review of tax affairs. However, there’s no guarantee they’ll share anything with you.
Step 2 – Send the certificate back to HMRC after ticking box 1.
Please note this is a important step because if the statement turns out to be false this could expose the tax payer to criminal investigation and prosecution.
Step 3 – Register for the Digital Disclosure Service (DDS).
Please note 90 day time period starts from the date you notify HMRC using DDS not from the date you sent the certificate back mentioned in Step 2.
Step 4 – We have now 90 days to:
- Gather the information to fill in the disclosure
- Calculate the final liabilities including tax, duty, interest and penalties on a year by year basis.
- Fill in the disclosure, using the unique disclosure reference number (DRN) given on notification
- Gather information on maximum value of overseas assets you have in the past 5 years
Complete and true – Disclosure should be complete and full co-operation needs to be given to HMRC
Number of years– Taxpayer will also need to self-assess their own behaviour, based on this assessment, tax payer will be presented with the number of years disclosure needs to be made.
|12 years||Non-deliberate (see below bonus point 2)|
|up to 20||Dishonest behaviour|
This will also have an effect on the quantum of penalty to be charged.
Step 5 – It’s a condition of using this facility that we make an offer for the full amount of taxes, duties, interest and penalties owed.
We must make full payment in accordance with the disclosure on the same date that the disclosure is submitted.
We will get an acknowledgement from HMRC within 15 days of them getting the completed disclosure. They will aim to tell us of the intended course of action within 90 days of the acknowledgement.
- Penalty calculation – India is not on the list thus falls in the residual category 2.
- Time period for offshore assessments was changed in 2019. This override RTC Regulations. Earliest year for if reasonable care taken is 2013/14. If behavior careless earliest year is 2011/12. These time periods will change on 6th April 2021.
- Penalty Suspension – Penalty for the year 2016 to 2017 and later years can be requested to be suspended refer Testa v HMRC FTT (TC 2549) ,  SFTD 723