Why disclose under the DDS?
Where there are tax irregularities that require correcting, being proactive is the best thing you can do. By coming forward and making an unprompted disclosure to HMRC, you’ll receive a significantly lower penalty than if HMRC were to write to you first.
Whether you believe you need to make an unprompted disclosure, or because HMRC have contacted you, making a full and complete disclosure will also provide you assurance that, following its acceptance, HMRC won’t open an enquiry to check the risk it sees present.
If you’ve received a ‘nudge’ letter, then it’s likely that HMRC has information to suggest that there are errors in your tax affairs. You shouldn’t ignore this letter – if you do, HMRC may open an enquiry. It’ll often be quicker and more cost-effective to ensure your affairs have been reviewed by tax experts, who can let you know if you need to take any corrective action, and how best to mitigate any penalties which may be due.