Regulation  

Time running out to disclose tax affairs to HMRC

Time running out to disclose tax affairs to HMRC

Time is running out for people to disclose their tax affairs to HM Revenue and Customs, according to tax and advisory firm Crowe Clark Whitehill.

In the Budget this spring, the chancellor brought forward deadlines to disclose from September 2016 to December 2015.

The firm surveyed 102 accountants, finding that only 19 per cent had informed clients of beneficial disclosure facilities.

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Some 63 per cent were either unaware or lacked detailed knowledge of other disclosure facilities relating to the Isle of Man and the Channel Islands, while only 37 per cent of accountants fully understood the facilities and terms on offer.

A further 38 per cent have seen an increase in voluntary disclosures, up 7 per cent from 2014, and 99 per cent of UK accountants called for a general tax disclosure mechanism.

This indicates that some aspects of HMRC’s initiatives are working, but there are still areas for improvement, according to Crowe Clark Whitehill.

Only 19 per cent of respondents have seen a tax fraud investigation since the Contractual Disclosure Facility opened in 2012, prompting the firm’s tax investigations partner John Cassidy to comment: “It is alarming that now, with all the facilities closing by December 2015, so many accountants still haven’t informed their clients about the options, despite their beneficial terms.

“The rise in voluntary disclosures since its introduction in 2007 indicates that they are an effective means of encouraging people to fully disclose their tax affairs – but a lack of understanding amongst advisors is holding back the uptake.”

ruth.gillbe@ft.com