HMRC are now starting the process for issuing penalty notices for disclosures made under the Worldwide Disclosure Facility (WDF) where HMRC issued protective assessments prior to 5 April 2021.

  • The Worldwide Disclosure Facility (WDF) was introduced in 2016 and currently remains open for disclosures relating to offshore issues for tax years up to and including 2018-19.
  • Earlier this year protective assessments were raised by HMRC, something which happens every year as the end of the tax year approaches.
    • This was particularly important for HMRC in relation to offshore tax liabilities this year to ensure they did not miss the 5 April 2021 extended deadline under the Requirement to Correct rules.
    • The extended deadline means that any tax which was assessable at 6 April 2017 remained assessable until at least 5 April 2021.

Having issued these assessments, which are based on the WDF disclosures made, HMRC now have a limited timeframe within which they can raise penalties on the amounts assessed.

  • Their intention is to first speak to the taxpayer or their agent to establish why the disclosed errors occurred and then write advising what level of penalty will be charged, all before any penalty notices are issued.
  • Anyone who appealed their protective assessment on the basis that they wished to conclude a contract settlement will not be contacted by HMRC.

Once the penalty notices are issued they can be appealed within the normal Penalty appeal process which has a 30-day time limit.

Anyone who made a Disclosure under the WDF and received an assessment before 5 April 2021 which they have not appealed should expect a call from HMRC followed by penalty letters.

  • If they are still able to do so they may wish to consider making an appeal against the assessments on the grounds that they agree to enter into a contract settlement with HMRC.
  • As the appeal deadline has already passed they would need HMRC to agree to accept a late application which is by no means certain and advice should be taken accordingly.

Useful guides on this topic

Worldwide Disclosure Facility
This is a freeview 'At a glance' guide to the Worldwide Disclosure Facility (WDF).

Making a tax disclosure (Digital Disclosure Service)
A practical guide to making a tax disclosure using HMRC's online system.

How to appeal a tax penalty (subscriber version)
What are the steps in making an appeal? What should your appeal cover? What does recent case law say on this topic?

How to appeal an HMRC decision
Disagree with a HMRC decision? How to appeal, what type of decision can you appeal, what are your different options when you disagree with HMRC? What are the key steps in making an appeal?

Grounds for Appeal: HMRC error or flaw
When can an error, mistake or procedural flaw made by HMRC provide a valid ground for making an appeal?

Offshore income toolkit
This toolkit provides an outline of the tax issues for UK resident individuals with offshore income and investments.


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