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HMRC Worldwide Disclosure Facility

How many years to disclose

I’m making a disclosure under the HMRC Worldwide Disclosure Facility for a client.

Facts are as follows – 82 year old receiving a Widows pension from the USA of around £6k pa. Added to her State Pension she is due to pay around £1k pa in tax.

I’m trying to self-assess her behaviour in order to establish how many years she will need to disclose – 4, 6 or up to 20. My feeling is that an 82 year old (76 when she first received the US pension) who had recently been widowed could not be expected to be aware that she was owe tax or needed to register for Self-Assessment. That’s doesn’t agree with HMRC’s helpsheet which defines reasonable care (4 years’ disclosure) as “…you took care to make sure your tax affairs were right”.

Does anyone have any thoughts or prior experience?

TIA

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09th Nov 2017 10:36

Your client doesn't have a duty to self-assess her behaviour. It's up to HMRC to make the assessment, and your client to accept their assessement or appeal.

Given that their idiot computerised disclosure requires the taxpayer to self-assess their behaviour, I always advise self-assessing as having taken reasonable care. HMRC can then take a different view if they want.

You can then only provide the four years.

What sometimes happens next is that HMRC ask for more years. To which the response is, given that our client considers she has taken reasonable care and you can, therefore, only assess 4 years, why do you want more?

Put the onus on them to say that they don't beleive that she has taken reasonable care. Then you can give them the missing years, making it clear that you don't agree that she has not taken reasonable care.

That means you get to take a view, on whether or not to accept or dispute HMRC's assessment of the position, without ever having to admit (or do something that suggests) any culpability on your client's part.

Since notvery much tax is at stake, HMRC may well not force the issue.

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10th Nov 2017 18:34

Does your client separately need to file any US tax returns? Given that she entering a UK disclosure facility it would be prudent to review her US tax position at the same time.

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