Put things right before HMRC contacts you

Do you know that you can make voluntary disclosures to HMRC?

If you think you might owe tax or haven’t declared all your income, you can voluntarily disclose this to HMRC. It is better to tell HMRC than wait for them to find out, resulting in lower penalties on any outstanding tax.

In more serious cases, HMRC may start a criminal investigation – but this is less likely if you make a full and honest disclosure yourself.

Why make a disclosure?

If you know you have underpaid on your taxes, you should make a disclosure. Your tax situation may be wrong for multiple reasons, but disclosing this will benefit you in the long run. Not only will it reduce stress, but it can also reduce penalties and help you avoid criminal charges. HMRC also offers additional support for anyone affected by health or personal circumstances. 

Disclosure options

There are different ways to make a disclosure depending on your situation:

• Contractual Disclosure Facility (CDF) – for cases where you’ve deliberately not paid the right tax. HMRC will not prosecute if you fully disclose using this route.
• Research and Development (R&D) Relief Disclosures – if you’ve overclaimed and it’s too late to amend your return.
• Crypto asset Disclosures – covering income or gains from crypto (e.g., tokens, NFTs).
• Till System Misuse – if you’ve manipulated your till to lower your tax bill.
• Coronavirus Job Retention Scheme (CJRS) Grant Repayments – for employers who need to repay furlough grant overclaims.
• Digital Disclosure Service (DDS) – the most common route for individuals and companies to disclose unpaid Income Tax, CGT, Corporation Tax, and more.

You can find links to all these options on HMRC’s website.

What to include

You need to disclose all previously undeclared income, gains, and taxes. HMRC expects full and accurate details for each tax year you’re correcting. You’ll need to:

• Work out what you owe for each year
• Include penalties and interest
• Keep records and evidence of your calculations
• Include Corporation Tax if you’re disclosing undeclared company profits

If you don’t have all your records, you should estimate, using your bank statements or previous data.

How far back to go

This depends on why you didn’t pay the correct tax:

• Up to 4 years – if you took reasonable care
• Up to 6 years – if it was due to carelessness
• Up to 20 years – if it was deliberate

If offshore income or assets are involved, extra rules may apply.

What not to include

Current or prior tax year income shouldn’t be included in the disclosure – it should be submitted through your normal Self-Assessment or Company Tax Return. You can still amend previous returns within HMRC’s time limits.

Need help?

You don’t have to do it alone, we can help guide you through it. Just get in touch.

For more details, including links to the relevant HMRC services, visit the official HMRC guidance: Tell HMRC about underpaid tax from previous years – GOV.UK

Worried you’ve missed something on your tax return?

Contact Whittaker & Co – we’ll help you get back on track, no judgment, just expert support.

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