Mala Kapacee highlights areas to keep in mind when choosing a disclosure route, making the disclosure and communicating with HMRC after submission
Disclosures to HMRC are a way of letting the department know when there is an under-declaration of tax. A disclosure to HMRC must be complete and correct. This means that it must include all instances of under-declaration of tax known to the client subject to the relevant time limits.
In the same way that HMRC is governed by time limits for raising assessments, so the same time limits govern the period(s) the disclosure must cover. This means that a person who has taken reasonable care with their tax returns would only need to go back four years; while someone who failed to take reasonable care needs to go back six years, etc. Be aware that the time limits are extended if the disclosure relates to tax arising from overseas assets.
For failure to notify, the time limits are different again. If the failure to notify was due to the taxpayer’s ‘negligent conduct ’or similar by someone acting on their behalf, then HMRC can raise assessments going back the full 20 years unless there is a reasonable excuse.
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