ICAEW.com works better with JavaScript enabled.


HMRC invites UK residents to come clean over overseas tax affairs


Published: 12 Jun 2023 Update History

A new one-to-many compliance campaign is targeting taxpayers named in the Pandora Papers. It invites them to make use of the contractual disclosure facility (CDF) or the worldwide disclosure facility (WDF).

The Pandora Papers comprise 11m records from 14 offshore financial service providers released by the International Consortium of Investigative Journalists during 2021 and 2022. 

HMRC has been using the information contained in the papers to identify UK taxpayers who may have taxable income or gains they have not declared. HMRC’s letter invites recipients to update their tax affairs and reminds them that penalties of up to 200% may be charged on the tax due on any overseas income and gains not declared.

It is important that recipients use the correct disclosure facility. The CDF is only suitable for taxpayers who want to admit to tax fraud. By entering the CDF, a taxpayer will:

  • admit that their deliberate conduct has brought about a loss of tax;
  • tell HMRC about all the tax losses brought about by their deliberate conduct;
  • give as much detail as they can within 60 days of being offered the contract;
  • provide additional details, in the form of a report, following the 60-day period which includes a statement that they have given HMRC complete and accurate details of their deliberate conduct.

In turn, HMRC will agree not to criminally investigate with a view to prosecuting them for the deliberate conduct they admit to in the CDF contract.

The WDF is available to anyone who wants to disclose a UK tax liability relating to:

  • income arising from a source in a territory outside the UK;
  • assets situated or held in a territory outside the UK;
  • activities carried on wholly or mainly in a territory outside the UK; or
  • anything having effect as if it were income, assets or activities of a kind described above.

Any eligible user of the WDF must make a full disclosure of all previously undisclosed UK tax liabilities and calculate interest and penalties based on the existing legislation. Provided the disclosure is correct and complete, and the taxpayer fully co-operates by supplying any further information requested, HMRC will not seek to impose a higher penalty except in specific circumstances. 

The WDF Facility does not provide any protection from prosecution. Where there has been deliberate and/or fraudulent conduct such as evasion, the CDF is the more appropriate facility. Anyone unsure about which facility to use should seek specialist advice.

The Tax Faculty

ICAEW's Tax Faculty is recognised internationally as a leading authority and source of expertise on taxation. The faculty is the voice of tax for ICAEW, responsible for all submissions to the tax authorities. Join the Faculty for expert guidance and support enabling you to provide the best advice on tax to your clients or business.

More support on tax

ICAEW's Tax Faculty provides technical guidance and practical support on tax practice and policy. You can sign up to the Tax Faculty's free enewsletter (TAXwire) which provides weekly updates on developments in tax.

Sign up for TAXwireJoin the Tax Faculty

More from the Tax Faculty

Latest news
Making tax digital image

Stay up to date with the latest developments in tax by signing up to the Tax Faculty's weekly e-newsletter

Practical guidance

Comprehensive support for Tax practitioners each month from the Tax Faculty and expert contributors.

Technical support
Tax Faculty image

Expert advice from the Tax Faculty's technical managers on all the developments in tax policy and practice.