What did HMRC do with the Pandora Papers data?
The Pandora Papers included material from 14 offshore service providers specialising in the creation of companies, trusts and other arrangements used to hold income and assets. They were first released in 2021 by the International Consortium of Investigative Journalists. The papers exposed 11.9 million documents revealing how wealthy individuals used offshore structures in low or no‑tax jurisdictions.
In 2023/24, HMRC issued 1,277 letters to UK taxpayers named in the documents; as of May 2025, it is understood that 220 responses were received.
HMRC’s letters urged taxpayers to review their UK tax affairs and correct any inaccuracies, warning that penalties of up to 200% of unpaid tax may be charged under the “Failure to Correct” regime, which applies to offshore matters in tax years up to and including 2015/16. In more serious cases involving deliberate or fraudulent behaviour, HMRC highlighted that prosecution was possible, placing significant pressure on taxpayers to act promptly and seek expert guidance.
What are HMRC doing with this data now?
HMRC have gone quiet on what specifically is being done to pursue those who failed to engage with the nudge letters, although there are signs that non-responders won’t be forgotten.
HMRC’s focus on offshore matters remains strong with Budget announcements that at least 400 officers will specifically tackle wealthy offshore non-compliance by 2029/30 within a new focused Wealthy Complex Cross Tax and Offshore team. The use of offshore centres and structures is often associated, rightly or wrongly, with attempts to conceal wealth, reduce transparency or avoid scrutiny, which remains a major concern for the UK tax authorities
Ministers have also committed to a 20% increase in criminal prosecutions for serious tax fraud by 2029/30, with offshore evasion explicitly cited as a high‑risk area. There is a huge recruitment drive aimed at tackling the tax gap, indicating that HMRC intends to use prosecution more actively – particularly where offshore assets have been deliberately concealed or where taxpayers fail to engage following intelligence‑led interventions.
Which disclosure route should taxpayers consider?
For taxpayers named in the papers, choosing the correct disclosure route is critical. Where behaviour has been deliberate, HMRC expects a disclosure under the Contractual Disclosure Facility (CDF), also known as Code of Practice 9 (COP9). This is the only framework that offers immunity from prosecution in exchange for a complete and honest disclosure of all tax irregularities, deliberate or otherwise. Where issues do not involve deliberate behaviour, the Worldwide Disclosure Facility (WDF) may be more appropriate.
Even individuals who have not yet received a letter but have offshore interests are advised to review their tax affairs promptly. Making a voluntary disclosure before HMRC makes contact usually results in lower penalties and a more constructive relationship with HMRC. Early dialogue also helps prevent future enquiries, even in cases where no tax is ultimately due.
Navigating HMRC’s offshore compliance campaigns can be complex and stressful. Crowe’s Tax Disputes and Investigations team has extensive experience in disclosures, disputes and investigations, working alongside individuals and their advisers to determine the right route forward and manage communication with HMRC.
For anyone concerned about their position or seeking clarity on whether a disclosure is needed, professional advice should be sought at the earliest opportunity. Please get in touch with your usual Crowe contact if you need any assistance.
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