HMRC Enquiries & Voluntary Disclosures

Disclosure of Offshore Income & Gains

The Problem

Our client had undisclosed income and gains from a Swiss bank account and wanted to bring his tax affairs up to date whilst ensuring that the tax was calculated correctly and penalties minimised.

The Solution

We provided advice and illustrative computations comparing the Swiss Tax Treaty with the Liechtenstein Disclosure Facility (LDF) and a voluntary disclosure to HMRC.

The Result

HMRC accepted our disclosure and the calculations of tax, interest and penalties without amendment.

The Problem

Our client came to us as they had been advised by their overseas bank that it was likely they should be paying UK tax on their foreign pension income.

The client was unsure how to calculate his UK tax liability, or which years needed to be accounted for.

The Solution 

We provided our client with advice which set out:

• The amount of his UK tax liabilities on the foreign income. As part of this work we converted the foreign income into sterling using the appropriate exchange rates and identified that only 90% of foreign pension income received was chargeable to UK tax.
• Provided advice regarding which years were required to be disclosed to HMRC. In this case the taxpayer had received some inaccurate advice which may have limited the number of years that HMRC could assess to 4 tax years, however in practice this point was not tested because whilst reviewing the taxpayer’s bank statements we discovered that our client had paid the one-off levy under the UK-Swiss Cooperation agreement, the effect of which was to regularise his tax position up to 2013 thus restricting the number of years for which a disclosure was required.
• How the tax liabilities should be dealt with. We advised that 2016/17 and 2015/16 were in time to be included on tax returns, whereas for earlier years a voluntary disclosure would be required and that the Worldwide Disclosure Facility (WDF) would be a suitable mechanism for the disclosure.

Once the client reviewed our advice and figures, we made the appropriate notifications to HMRC and subsequently submitted the tax returns and disclosure.

The Result 

The tax returns and disclosure report and accompanying calculations were accepted by HMRC, thereby giving our client the peace of mind that their compliance obligations had been met and that their tax affairs were in order.

The Problem