Tax Disclosure
Our practical and robust approach delivers the best possible outcome.
Our webinar Finance Act 2020: Coronavirus receipts and penalties looks at this in more detail.
Webinar: Finance Act 2020
Since the introduction of the Coronavirus Job Retention Scheme, otherwise referred to as furlough, HMRC have been keeping a watchful eye on proceedings. In July they announced that they had made their first arrest in connection with coronavirus-related fraud, showing that they intend to act quickly to recover money incorrectly claimed or used.
Companies using the Coronavirus Job Retention Scheme will need to pay close attention to how they are recording information to ensure that they do not incur penalties, and are not committing furlough fraud.
Types of disclosure
Voluntary Disclosure
Voluntary disclosure of unpaid or underpaid taxes will result in:
- lower professional costs
- lower penalties
- allowance for negotiation for protection against criminal prosecution (in serious cases).
Prompted Disclosure
Prompted disclosures will usually carry higher penalties. It is important to seek professional advice, which will:
- help prevent an HMRC data fishing exercise
- ensure a high quality disclosure, which will help reduce penalties
- enable negotiations with HMRC to achieve the best possible outcome
- ensure the best defence against criminal prosecution (if necessary).
Why disclose now?
Increased chance of discovery
- There is now an automatic exchange of financial information between countries; the Common Reporting Standard.
- HMRC’s ‘connect’ software allows the collection and analysis of billions of lines of data, meaning individuals are more susceptible to investigation by HMRC (whether correctly or not).
Consequences of non-disclosure
- Higher penalties from HMRC which, for offshore offences, could be (up to 300% of the tax due).
- Reputational damage from HMRC’s ‘Name and Shame’.
- Change in HMRC stance (more prosecutions).
