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Do I need to make an HMRC voluntary disclosure?
If you have concerns regarding undisclosed taxable income or unpaid taxes; then making an unprompted voluntary disclosure to HMRC represents your best route to finding peace and calm in your life once again. HMRC are now better informed than ever; making use of sophisticated piece of software known as “Connect” to find those individuals and businesses who may be operating outside the tax system. HMRC have always had access to huge swathes of third-party information about all of us; much of this within the public domain.
Examples include:
- Land registry – every property transaction that takes place in the UK produces a document at the land registry. This document includes the buyer /sellers name, address details and the purchase / sale price of the property involved. HMRC will often use this intelligence when tracking down errant landlords who have undisclosed rental income or who have not disclosed the sale of an investment property which gives rise to a charge to capital gains tax.
- Companies House – contains a vast amount of information on directorships and company interests. HMRC will also be able to use information on the companies’ house website to identify directors who have a history of insolvency and who have avoided paying taxes as a result.
- The benefits agency and tax credits
- Experian or Equifax – A credit search can reveal a complete history of our financial affairs over 6 years. This includes addresses, linked addresses, linked parties, bank and credit accounts. With the correct skills it is reasonably straight forward to obtain a snapshot of any individuals financial standing and apparent wealth using what may appear to be very limited and innocent information
- Banks and Building Societies – share account information with HMRC in the form a Section 352 certificate. This includes details of interest earned with the tax year. The interest figure can be scaled up using applicable rates of interests to arrive at a figure of possible capital on hand.
- The internet – websites, social media, eBay, Amazon and other merchant platforms can all be accessed and interrogated by HMRC using the Connect software. There are suggestions that up to 95% of HMRC tax investigations are launched because of information revealed by Connect.
Hidden economy
The stark reality is; if you have been operating in the hidden economy or if you have not been paying the tax that you should, HMRC will eventually catch up with you. It is purely a question of time. It is time that is often our worst enemy. A mistake is made. The mistake perpetuates because human natures default mechanism is often set to ignore problems. We all tend to bury our head in the sand at times.
The benefits of making an unprompted voluntary disclosure to HMRC. The benefits of coming forward and making a full voluntary disclosure to HMRC are potentially life changing.
These include:
No criminal prosecution
If you come forward with a full and frank voluntary disclosure of tax irregularities HMRC will almost always deal with you using their civil powers. During my time in this industry; including a significant spell within HMRC compliance; I have never known HMRC to instigate a criminal investigation where a full voluntary disclosure is made.
Begin sleeping again
Once you have opened the door and come forward with an intention to make an HMRC voluntary disclosure the psychological impact can be huge. I see this time and again when dealing with clients who appoint Admiral Tax Investigations to represent them in managing, preparing and filing their HMRC voluntary disclosure. It is the fear of the unknown that often prevents rational thinking. If you think of the old horror movies; it is the man in the dark and in the shadows that terrifies us the most.
Reduced penalties
An HMRC voluntary disclosure guarantees a more lenient approach by HMRC. Admiral Tax Investigations have a fantastic record in achieving the minimum possible penalty action being taken by HMRC at the end of the voluntary disclosure process.
Peace of mind
Appointing Admiral Tax to handle your HMRC voluntary disclosure will give you absolute peace of mind from day one. We have a proven track record of success when dealing with voluntary disclosures as evidenced by the independent and validated reviews on Trust Pilot page
Further reading
Please do take the time to read our detailed HMRC disclosure pages: