What is the Worldwide Disclosure Facility?

The Worldwide Disclosure Facility is HMRC's named channel for people who need to correct their UK tax position because of undeclared offshore income, gains or assets. It runs through the same online Digital Disclosure Service portal used for domestic disclosures.

What sets it apart is the penalty structure. Offshore matters can attract higher percentages than equivalent onshore errors, reflecting the extra reporting requirements attached to overseas assets.

HMRC receives account data from overseas financial institutions through the Common Reporting Standard, an international agreement for automatic exchange of financial information between tax authorities. This means account balances, interest and sometimes property income held abroad can reach HMRC without you telling it.

Time limits for offshore matters under the Taxes Management Act 1970 extend beyond the standard periods, with up to 12 years available for careless offshore errors in some circumstances, and 20 years for deliberate behaviour.

Penalties for offshore inaccuracies follow Schedule 24 Finance Act 2007, with an offshore uplift applied depending on the transparency category of the country involved. The uplift can push penalty percentages well above onshore equivalents.

If you hold personal savings, property or investments overseas alongside running a UK company, offshore reporting obligations sit with you personally, not the company. A director's overseas rental income, for example, is usually taxed under Self Assessment.

Company-level offshore transactions, such as a subsidiary or overseas trading activity, are a separate matter and usually need specialist corporation tax advice rather than the Worldwide Disclosure Facility.

You pay the underpaid tax, interest, and a penalty within the offshore-adjusted Schedule 24 range. Disclosing before HMRC contacts you, as an unprompted disclosure, keeps you in the lower part of that range.

Given the complexity of offshore rules, specialist help is often worthwhile here. If a disclosure later develops into a formal enquiry, tax investigation insurance included with our Growth plans covers representation costs — see /fees.

Do not assume small overseas accounts are below HMRC's radar. Common Reporting Standard reporting does not have a de minimis exemption for most account types.

Avoid using a domestic disclosure route for offshore matters. The wrong facility can mean the wrong penalty calculation and a rejected or reopened disclosure.

Do not delay once you know a Common Reporting Standard mismatch exists. HMRC often follows up with a nudge letter, which converts an unprompted opportunity into a prompted one.