In recognition that not all people who have made tax errors a) qualify for the Worldwide Disclosure Facility as they do not have undeclared offshore income, b) they cannot take part in the Let Property Campaign as they have no rental property or that c) the Contractual Disclosure Facility is not suitable as they either have not deliberately sent in incorrect tax returns or the amounts do not justify participation; HMRC have a catch all facility called the Digital Disclosure Service.
The Digital Disclosure Service is open to anyone where HMRC have not got an open investigation into their tax affairs but where they are aware that they have not paid the right amount of tax or they have failed to register that they need to pay tax. It is recognised that people make mistakes and they often do not know how to put it right and the Digital Disclosure Service is aimed to help people put things right.
It is open to UK resident companies, partnerships or individuals and covers all major taxes.
In order to take part all that needs to happen is for an online application to be made to take part in the Digital Disclosure Service and this can be done by the individual or by an agent, such as Gilbert Tax, on their behalf. If the errors occurred in a partnership each individual partner has to be notified separately.
HMRC will acknowledge the application and send out a reference number relating to the disclosure and payment information.
HMRC’s suggested deadline for calculation of the errors and the disclosure of these along with the interest and the penalty is 90 days. This is not a statutory deadline and if more time is needed due to the matter being complicated or information been sought to assist in the disclosure, HMRC will generally agree to an extension of the deadline.
HMRC recognise that not all records will be retained but suggest that as a minimum the figures of omissions are based on bank statements and best estimates and that the individual should be able to explain what they have estimated and how as HMRC will ask about this after the form is submitted. We would also recommend getting credit card statements as well.
HMRC ideally would like all of the tax, interest and penalties be paid at the time the form is submitted but do recognise that this is not always possible and can be open to a time to pay arrangement.
Gilbert Tax have vast experience of dealing with disclosures of tax problems to HMRC and as with the Worldwide Disclosure Facility and the Let Property Campaign we usually contact HMRC at an early stage to explain we are dealing with the matter (this cannot be done until a reference number is received) and that we will be sending in a comprehensive letter setting out the records we have seen, what estimates and assumptions we have made and provide relevant computations to show HMRC how the tax has been calculated at the time the form is completed.
The purpose of this is to endeavour to stop HMRC asking lots of unnecessary questions and to try to get a quick settlement of the matter.
With regards to expenses people often do not think that they can remember amounts etc and we take the time to discuss your business with you to understand what you would normally spend, use our experience of dealing with many businesses to prompt the sort of expenses that would be incurred, and where estimates are needed we are aware of what sort of costs people incur and also what sort of amounts HMRC will accept without challenge.
The Digital Disclosure Service is particularly useful for people who have never registered to pay tax when starting a business. This is usually not something they do deliberately but they are just too wrapped up in the business and before they know it two or more years have passed without completing tax returns and then the individual starts to worry that they may get prosecuted and tries to ignore the matter.
Gilbert Tax has a wealth of experience in assisting these people to get back into the tax system and in keeping the tax bill as low as possible whilst remaining within the scope and perimeter of the law.
Get in touch with us for confidential and no-obligation tax advice.
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Non-judgemental. We are here to help, not to judge
Rigorously defend your position within the scope of the law
Take control of the HMRC investigation
Efficient process to achieve the closure of your investigation
"We understand that people sometimes make mistakes in their dealings with HMRC and that HMRC make mistakes in dealing with taxpayers. Many people do not know how to deal with HMRC or who to turn to for help resolve the tax dispute.
Our firm of tax advisors specialise in resolving people's problems with HMRC. We have extensive expertise in dealing with all forms of tax investigations and tax disputes as well as with taking matters to the Tax Tribunal where agreement cannot be reached.
We deal both directly with the individual who is under enquiry and also work with many firms of accountants supporting them in dealing with HMRC disputes and advising them on how to handle HRMC to get the best result.
The fact is that proper management of HMRC is the best way of reducing the tax, interest and penalty as well as the time taken in resolving any tax dispute.
Our expert team are none judgemental and rigorously defend your position within the scope and parameter of the law. We take control and manage the process to minimise the interruptions that any form of tax investigation causes to an individual's life and business."