Digital Disclosure Service
Business Tax • Tax • Tax Disputes and Investigations
The Digital Disclosure Service (DDS) is HMRC’s online service which allows for voluntary tax disclosures. How could you benefit from using the HMRC DDS to correct your tax affairs?
What is the DDS?
The DDS is a HMRC disclosure service designed to allow you to bring your tax affairs up to date where mistakes have been made or things have been missed in the past. The DDS allows you to make full disclosure of any unpaid tax, under settlement terms which are often more preferable than if irregularities were discovered as part of a HMRC enquiry. The DDS is just one of the disclosure services that HMRC operates, which also includes the Worldwide Disclosure Facility and the Contractual Disclosure Facility.
Who can use the DDS?
The DDS is available to those who wish to correct their tax affairs. This includes those who’ve received a HMRC ‘nudge’ letter and have been prompted to make a disclosure.The HMRC DDS is open to individuals, companies, and trustees for disclosures of Income Tax, National Insurance Contributions, Capital Gains Tax and Corporation Tax. A separate disclosure would need to be made for each individual or entity.
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.