If you’ve received an HMRC 'nudge' letter or wish to regularise any undisclosed offshore income, you may need to make a disclosure using HMRC’s Worldwide Disclosure Facility (WDF). Here’s what you need to know about the WDF and how we can help bring your tax affairs up to date.

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The WDF is an HMRC digital service allowing taxpayers to disclose offshore non-compliance in relation to their overseas interests. Any individual, company or trustee can make a disclosure through the WDF, including those who are non-UK resident.

Why disclose under the WDF?

Under the Common Reporting Standard (CRS), HMRC receives financial information from over 100 different countries. This information is used to check against the declarations made by UK taxpayers to identify potential offshore non-compliance. An example would be where a taxpayer has filed tax returns containing inaccuracies in relation to offshore irregularities. Or where a taxpayer has failed to notify chargeability to tax, and hasn’t filed a tax return declaring offshore income, profits and/or gains.

By making a disclosure through the WDF, you’ll have more control over the process, and you’re likely to reach a settlement quicker than if HMRC were to open an investigation. This is because you determine the potential lost revenue, the behaviour that led to the offshore non-compliance, and the level of tax-geared penalty.

What is an HMRC ‘nudge’ letter regarding offshore non-compliance?

The purpose of an HMRC ‘nudge’ letter is to prompt taxpayers to review their UK tax affairs in relation to their overseas interests, and correct any irregularities voluntarily by submitting a WDF disclosure.

What should you do if you receive a ‘nudge’ letter?

Firstly, do not ignore the letter. It’s likely that HMRC has information regarding your offshore interests and suspects there are irregularities in your UK tax affairs. To ensure you’re fully compliant, we would suggest you consult an expert in determining offshore non-compliance. We assist our clients by conducting a full review of their onshore/offshore tax affairs so we can advise on the best response to the HMRC ‘nudge’ letter, and whether a disclosure will be required.