I’ve been appointed as a trustee. What do I need to do?

Posted on By Joanna Pegum
man looks thoughtful

Have you been asked to take on a trustee (or executor) role for someone’s will? If so, did you understand what the role entailed, or take advice before accepting?

It’s all too common for people to agree to say yes without finding out what’s involved. Taking on an executor /trusteeship is not to be done lightly and you should take proper advice, especially if you are unfamiliar with estate and trust management.

First steps

If you’re a new trustee, you should establish the nature and extent of the trust asset(s), as this will also determine the nature of your responsibilities. For example, if it is a share in a property, is there insurance in place? Who is responsible for this and for other outgoings? Do you and the other trustees have access to the property so you can inspect it?

If the asset creates an income, have you registered the trust with HMRC and submitted regular income tax returns? Trusts do not have an allowance similar to personal income tax; but instead there is a trustee rate of income tax associated with a discretionary trust or other ‘relevant property regime’ trust. It’s worth speaking to a qualified practitioner to fully understand this and other issues.

If you fail to register with HMRC or pay income tax, you may incur penalties, so it’s better to do this at the outset. I know of one case where a man who was co-executor of his late wife’s estate, which included a nil-rate band trust and an IOU to the trust, had not registered the trust even after ten years! A very late filing to HMRC was required, and the family had to seek advice for what had become a messy and tax-inefficient situation.

Seek advice

If you’re appointed trustee, seek advice, and soon, as there are real responsibilities to fulfil both at the outset and going forward.

What about choosing trustees/executors for my own will?

If you’re making your own will and need to choose trustees/executors, you’ll need to consider whether they will agree, whether they can work well with any other named person(s), and if they are suitable for the position.

Pippa Bavington TEP is an Associate Solicitor Private Client with Giles Wilson Solicitors in Leigh on Sea, Essex 

What are the tax implications of investing in cryptocurrency?

Posted on By Joanna Pegum
trader with phone and laptop

Most of us lead lives that are heavily digital. We think nothing of sending emails in our personal and professional lives, reading e-books and e-newspapers, taking and sharing digital pictures and videos, and meeting our family, friends and others on social media. Investing in cryptocurrency might seem a logical next step, but what is it, and what are the tax implications?

For the last decade and more, many people have invested in blockchain with a view to creating a global accountancy system for the ownership of possessions (both tangible and non-tangible). Cryptocurrencies, including Bitcoin, Ethereum and Ripple are a type of non-tangible asset. These currencies are digital in nature, are not formally issued by any central bank, and can be traded or used as payment globally.

Cryptocurrencies take a range of forms including:

  • exchange tokens that can be used as payment for goods or services (similar to traditional currency);
  • utility tokens that provide the owner with access to certain goods or services; and
  • security tokens that provide the owner with security for a debt or provide the owner with profits from the security.

Legal questions arising

Cryptocurrencies have created problems from a legal perspective. It is unclear whether they are truly assets with value that can be owned, and if they are, whether they can be legally transferred to others, say, through a will or a prenuptial agreement.

If the owner of cryptocurrencies has a connection to more than one country or jurisdiction, it is not clear whose laws would govern the transfer of the cryptocurrencies and whose tax regime the currencies would be subject to.

In late December 2019, HMRC issued some guidance on its view of the law surrounding cryptocurrencies, focusing on exchange tokens.

The location of exchange tokens

Exchange tokens are considered to be situated for tax purposes in the jurisdiction in which the owner is resident. This may have a greater impact on those who are non-domiciled but resident in the UK (and paying tax on a remittance basis), as the cryptocurrencies are treated as being situated in the UK and will be subject to UK tax. See where is my domicile, if you are unsure.

Exchange tokens belonging to individuals who are not resident in the UK are not subject to the UK tax regime.

Tax treatment of exchange tokens for UK residents

Capital Gains Tax

HMRC’s view is that the majority of owners  considers that the majority of owners purchase or are given exchange tokens on an infrequent basis, wait for the value to go up, and then sell them. Profits made on exchange tokens are therefore subject to capital gains tax in the normal way, and a liability is incurred every time the exchange token is disposed of (ie sold, transferred to another, or used as payment) at a profit.

It’s important to keep records of the dates on which disposals are made (and the value of the exchange token on that date) to ensure that tax returns are accurate.

Income Tax

HMRC may tax gains made on exchange tokens as income for substantial traders of exchange tokens – and note that income tax rates are generally higher than capital gains tax rates.

Equally, if an individual receives exchange tokens (or any form of cryptocurrency) as a result of employment, then that will also be subject to income tax and national insurance contributions.

Inheritance tax

The value of cryptocurrencies owned by an individual is treated as forming part of the individual’s estate, and will be subject to inheritance tax on their death. Note again, the owner’s country of residence is an important factor in deciding whether the cryptocurrencies will be subject to UK inheritance tax.

Keep proper records

If you have cryptoassets, you need to keep records of the following when disposing of them:

  • the type of cryptoasset;
  • the date of the transaction;
  • whether if they were bought or sold;
  • the number of units;
  • the value of the transaction in pounds sterling;
  • the cumulative total of the investment units held; and
  • bank statements and wallet addresses, if needed for an enquiry or review.

Where can I get advice?

A qualified professional can provide advice and help you to make the necessary disclosures on your tax return.

• See also Do I need to declare my cryptocurrency to HMRC?

Joshua Ryan is a solicitor at Weightmans LLP, London 

Probate v confirmation: a comparison of the English and Scottish procedures for executors

Posted on By Joanna Pegum
train leaving Scotland for England

If you are the executor for a friend or relative’s estate, there are some substantial differences to consider, depending whether the estate is in England or Scotland.

The differences reflect the different legal traditions in the two jurisdictions – common law in England, which originated in the Ecclesiastical courts of the Middle Ages, and civil law in Scotland.

Different terms are used

Different terms are also used. The document the court issues for the executors is called probate in England where there is a will; and confirmation in Scotland, whether or not there is a will.

In Scotland, the person who handles the estate is always called an executor. If they are appointed in a will, they are an executor nominate; where there is no will, an executor dative; but both kinds of executor need to seek a grant of confirmation.

Sometimes the Scottish and English terms are different even though they are describing essentially the same thing. The English say real and personal property, while the Scots say heritable and moveable; the English say life interest and remainder, while the Scots say liferent and fee; and the English say administration of estates, while the Scots say executry administration.

What are the real differences?

In England, probate tells the world that the executors named in it are entitled to deal with the assets of the estate because they are named in the will.

In Scotland, confirmation effectively transfers the estate assets to the executors so they can administer them, subject to the terms of the will. Scottish executors step into the shoes of the deceased person (in a legal sense), and they (and only they) can deal with the person’s assets and enforce their rights, for example calling in any debts the estate is owed.

When executors in Scotland apply for confirmation, which uses a form called C1, they must include a complete list of the deceased’s assets in the UK, together with their values. Along with the will, this becomes a public document when lodged in court.

This is not required in England, where the only information that is public is the total value of the estate, both gross and net.

In Scotland, the Sheriff Court issues confirmation, which is a copy of Form C1 with the court order attached to it. The court issues certificates of confirmation so executors can send the confirmation to all asset holders simultaneously. Unlike the office copies of probate, issued in England, these are specific to each asset, and include a description and value as stated in Form C1.

Both probate and confirmation were well established long before estate duty (or inheritance tax) was introduced, and they double up as a tax return for the estate assets.

What happens if other assets are discovered later on?

In England, a person or organisation receiving an office copy of probate has no way of knowing how the gross value of the estate was made up, or what value was given for their asset. Because of this, English executors can deal relatively easily with additional assets that may come to light later, though of course they are required to report them to HMRC where inheritance tax  is payable.

In Scotland, however, executors will usually need to apply to the court for an eik (a Scots word for an addition) or supplementary confirmation, which details the additional assets. Executors need to report all applications for an eik to HMRC before the Sheriff Court will accept them, even if no tax is payable and the original Form C1 did not have to go to HMRC.

Occasionally executors can deal with additional assets of lower value without the need for an eik, but they generally have to inform HMRC, and may be required to produce written evidence that they have done so.

Will this hold things up?

If English executors omit or undervalue an asset in the probate application and the inheritance tax form, which is known as IHT400, they will still be able to deal with the assets by producing the original grant of probate or an office copy.

Scottish executors who omit details of an asset will not be able to deal with it until they have told HMRC and obtained an eik to confirmation.

The Scottish requirement to include a list of all the estate assets in Form C1 makes it simpler in cases where inheritance tax needs to be paid. In England, the IHT400 and supplementary forms request exact details of the estate assets, and English executors have to complete all the forms in full.

As Scottish executors have already set out all the assets and values in Form C1, HMRC accepts inheritance tax returns which simply show the total value for each category of asset, and can refer to Form C1 for the detail.

Your advisor will be able to help you through this process.

Ian Macdonald TEP is Head of Private Client at Wright Johnston & Mackenzie, Glasgow.

I’m looking after my aunt’s estate, and realise she failed to disclose rental income on her old home. What should I do?

Posted on By Joanna Pegum
man inspects paperwork

Your late aunt appointed you as the personal representative of her estate, but when sorting through her paperwork, you discovered she had rental income from letting out her old home, after moving into residential care. However, your aunt did not declare this income to HM Revenue and Customs. What should you do?

As your aunt’s personal representative, it’s your responsibility to collect details of her assets and liabilities at the date of her death, and declare them to HMRC for all taxes, not just inheritance tax.

How do I make a disclosure to HMRC?

HMRC has introduced a ‘Let Property Campaign’ to make the process simpler. This gives taxpayers the opportunity to report undeclared rental income and expenses, and pay any tax owed. You will also benefit from more favourable tax terms using this system.

To take part in the Let Property Campaign, you should:

  • Notify: tell HMRC online via the Digital Disclosure Service (DDS), that you want to take part in the Let Property Campaign on your aunt’s behalf;
  • Disclose: tell HMRC about her rental income and expenses;
  • make a formal offer; and
  • pay any tax and interest owed

When you notify HMRC, you will receive a Disclosure Reference number (DRN) and Payment Reference number (PRN). You then have 90 days from HMRC’s acknowledgment to make a full disclosure and pay any tax owed.

My aunt has incurred expenses in letting out her property.  Can I claim for these?

Yes, you can claim expenses including fees for professional services, such as a letting agent or accountant, insurance, and repairs. It is also possible to claim for loan interest, if there is a mortgage outstanding, though this is now restricted for residential properties, but not commercial properties. If in any doubt, you should seek professional advice.

Do I have to pay interest on the tax owed, and are there any penalties for late payment?

HMRC will currently charge you interest at 7.75 per cent on any tax paid late. This is not a penalty, but ‘commercial restitution,’ as your aunt had the use of money which was owed to HMRC.

As her personal representative, you won’t normally be liable for penalties for any irregularities in her tax affairs.

In theory, HMRC can go back 20 years under the Let Property Campaign. However, for a deceased taxpayer, this will probably be limited to the ‘in-date’ tax years, which will be the four previous tax years.

Katie Buckley TEP is a Director of The Tax Angel Consultancy Limited

How is Capital Gains Tax charged on death?

Posted on By Joanna Pegum
man thoughtful by sea

When someone dies their estate is valued for probate purposes before being distributed to the person’s heirs. It is then potentially subject to Inheritance Tax (IHT), but is generally exempt from Capital Gains Tax (CGT); the rationale being that the same assets cannot be subject to both capital taxes. The beneficiary is treated as if they acquired the asset at its probate value. This is known as the CGT tax-free uplift on death.

It may be tempting for executors to down-value assets such as property, with a view to reducing the IHT bill, but this will only reduce the base cost of the asset, and potentially increase any CGT liability, so this needs to be considered.

Who should realise the capital gains – the estate or the beneficiaries?

Often the executors will sell some or all the assets, and then distribute the cash to the beneficiaries. In this case it is the executors who make any post-death gains/losses, so they will be responsible for formally registering the estate with HM Revenue & Customs and reporting any capital gains.

In respect of residential property disposals, it may also be necessary for the executors to complete an online 60-day capital gains tax return to report and pay any CGT due within 60 days of the date of completion of any property sale. The disposal will also need to be declared on any formal estate tax return which may be issued.

The executors are able to claim the full annual CGT exemption, currently £6,000 for 2023/24, reducing to £3,000 from 6 April 2024. The annual CGT exemption is available to the executors in the year of death and in the two following tax years. Any chargeable gains are subject to CGT at the higher rate, which is 28% for residential properties and 20% for all other chargeable assets.

There can however be some tax planning opportunities if assets are transferred to beneficiaries before they are sold. The beneficiaries can stagger the sales of assets over different tax years, and possibly claim multiple annual CGT exemptions. They can also utilise any personal capital losses they may have brought forward, and potentially pay tax at a lower rate than the executors, if any of the gains fall within their basic rate band, so they would pay tax at 10/18% instead of 20/28%.

What about the deceased’s CGT position in the year of death?

While CGT liabilities die with you, what about assets that the deceased has already disposed of in the tax year in which they die?

Any capital gains have to be disclosed on the deceased’s tax return for the period from 6 April to the date of their death, and they are entitled to a full annual CGT exemption.

Capital losses in the period to the date of death are automatically offset against any capital gains. Any capital losses brought forward can be offset, as long as any chargeable gains exceed the annual CGT exemption.

Any unused capital losses still remaining can be carried back and offset against any capital gains the deceased may have realised in the three tax years prior to the tax year of death. The losses must however be offset against gains in a later year, before setting them off against gains from an earlier year.

Katie Buckley is a Director of The Tax Angel Consultancy Limited

Do I need to declare my cryptocurrency to HMRC?

Posted on By Joanna Pegum
Attending to paperwork

There is currently widespread uncertainty about the tax treatment of cryptocurrency investments and trading activity.

If you have sold, gifted or spent cryptocurrency within the tax year, you may need to declare any profit or gains on your self-assessment tax return.

If you do not declare taxable income or gains, you may be liable to interest and penalties.

How much tax will I need to pay on my cryptocurrency?

Profits made on cryptocurrencies by individuals is generally subject to capital gains tax at a rate of up to 20% after deducting the annual allowance (£12,300 for the 2020/21 tax year). Where you have bought and sold cryptocurrencies through a UK company, any taxable profits will be subject to corporation tax at a rate of 19%. If you have regularly bought and sold cryptocurrencies, HMRC may say that you are liable to income tax at a rate of up to 45%. Most exchanges will keep a record of your transactions and let you download your history.

If I gift my cryptocurrency, am I liable to tax?

Under existing capital gains tax rules, if you gift your cryptocurrency or use it to buy other capital assets (including exchanging one cryptocurrency for another), you will have to pay tax on any increase in the value of your cryptocurrency between the date you acquired it and the date of the gift or purchase (subject to any available reliefs or allowances). Similar rules apply if you are subject to corporation tax or income tax on your profits.

How will HMRC know about my profits?

HMRC has significant powers to acquire and analyse information on UK taxpayers. If HMRC raises an enquiry into your tax returns, it is likely to question the appearance of profits in your bank account that have not been accounted for. The UK and EU are also currently consulting on new regulations that may require trading platforms to report information on certain account holders to the relevant national authorities.

What if I have made a loss?

If you have made a loss, you may be able to offset these losses against your cryptocurrency profits or other capital/trading profits. If you have bought and sold cryptocurrencies through a UK company and the company has made a loss on any individual transactions, loss relief may be available under the corporation tax loss relief rules. As mentioned above, many exchanges will keep a record of your transactions and let you download your history. It is essential to keep these records on file so that you can claim relief for any losses that you make.

What if I fail to declare any taxable profits?

HMRC has up to 20 years following the end of the relevant tax year to enquire into your tax returns. If you deliberately fail to declare taxable income or gains and tax has been underpaid, you may be liable to interest and penalties of up to 100% of the amount of tax due. In the most serious circumstances, criminal liability may apply.

Where can I get advice?

A qualified professional can provide advice and help you to make the necessary disclosures on your tax return.

Helen Cox is Partner in the Private Client Department at Fladgate, and Andrew Goldstone TEP is a Partner at Mishcon de Reya, London, UK

What is confirmation in Scotland?

Posted on By Louise Polcaro
confirmation,Scotland,inheritance

Confirmation is the Scottish equivalent of the probate procedure in England and Wales and Northern Ireland. It is granted by the Sheriff Court in the district in which the deceased was resident and provides the executors with authority to deal with the estate; whether it be closing bank accounts, selling property or transferring or selling shares.

While there are similarities with the probate procedure, there are also significant differences, principally in terms of the paperwork required.

For ‘small’ estates with a gross value of (currently) £36,000 or less, executors are entitled to free assistance with obtaining confirmation from the local Sheriff Court.

How do I apply for confirmation?

The process involves conducting a thorough examination of the deceased’s financial papers to draw together the information needed to complete the confirmation application form C1. This form accompanies the inheritance tax return and provides details about the deceased and the estate.

Where a person dies without a will, an application must first be made to the Sheriff Court to have an executor appointed and in most cases it will also be necessary to obtain an insurance document known as a Bond of Caution.  Legislation sets out who may be appointed as an executor in the absence of a will and it is important that the correct individuals are identified from the start.

The Form C1 includes a declaration by the executors confirming that the contents of the form are correct, to the best of their knowledge. As the declaration is similar to swearing an oath in court, it is crucial that full enquiries be made into the assets of the estate and into the deceased’s tax affairs.

Where inheritance tax is due, a copy of the signed confirmation application must first be submitted to HMRC along with the tax return, before being sent to the Court. The tax must be paid at the same time, either in full or as a first instalment where this is permitted. Once the application is submitted the Sheriff Clerk will check it and if satisfied, submit it to the Sheriff to issue the Grant of Confirmation.

How much will it cost?

Court fees are presently £276 for estates worth between £50,000.01 and £250,000 and £554 for all estates worth over £250,000. There is no court fee for estates with a gross value of £50,000 or less.

Separate charges ranging from £8 to £20 apply where individual ‘Certificates of Confirmation’ are requested, focusing on specific assets in the estate. These certificates are often used to speed up the ingathering process after Confirmation has been granted, as an alternative to circulating the original Confirmation document to each asset holder in turn.

The same fee will be charged again, in full, where it is necessary to amend the application after Confirmation has been granted, and care should therefore be taken to ensure that no assets are missed out or reported incorrectly.

It is crucial when obtaining confirmation that the specific procedures used in Scotland are followed. To ensure that the process runs as smoothly as possible, it is recommended that advice be sought from a suitably qualified advisor.

Jaclyn E P Russell TEP is a Partner and Head of Private Client at Stronachs in Aberdeen, Scotland

 

HMRC is investigating me. What do I do?

Posted on By Louise Polcaro
worry,tax,concern

HMRC’s powers enable it to check whether your tax returns are correct. HMRC uses the term ‘compliance check’ to cover all types of enquiries, investigations and visits to business’s premises.

What are the main types of compliance check?

Tax return enquiry

For individuals and trustees, the most common type of compliance check is an enquiry focusing on a specific tax return. This is opened within 12 months of the return’s submission, unless it was submitted late. HMRC requests information and documents to enable it to check any aspect of the return (including the original cost of assets sold) and to ensure the return is complete. When it completes its enquiries, HMRC usually issues an ‘enquiry closure notice’ to either confirm that the tax return requires no amendments or to amend it.

Discovery assessments

In other cases HMRC may use its powers to obtain information and documents before issuing ‘discovery’ assessments to collect income tax or capital gains tax (CGT) for past years.

Code of Practice (COP) investigations

In some cases HMRC’s Fraud Investigations Service may open Code of Practice (COP) 8 or 9 investigations.

COP9 is used for cases of suspected fraud or deliberate errors.

COP8 tends to be used for cases where fraud is not suspected so the problem is more likely to be a technical issue, for example whether someone needs to pay tax in the UK. Both these investigations can be lengthy and may end in civil (rather than criminal) settlements.

For a COP9, HMRC only allows 60 days for an individual to decide how to respond: admit deliberate errors and disclose what went wrong; or deny fraud. The risk is that failing to tell HMRC of deliberate errors or failures may result in prosecution, so getting advice from a specialist tax advisor quickly after receiving HMRC’s opening letter is essential.

If you face a criminal investigation then you need a specialist solicitor’s help immediately.

Seven tips for dealing with compliance checks

The following tips will help you to deal with enquiries or civil investigations into income tax or capital gains tax.

  1. Seek professional advice  quickly from an advisor who specialises in dealing with the type of enquiry or investigation that you face
  2. Provide HMRC with the relevant information and documents quickly, as delays may increase penalties if they are due
  3. Anticipate HMRC’s next question and answer it now – providing explanations often shortens the enquiry process
  4. Be ready to explain what went wrong if there is an issue with your tax return – HMRC needs to know in order to decide if a penalty is due. Penalties can be up to 300% of the tax and may result in publishing of your details, although careless error penalties may be suspended
  5. Making a payment on account of tax due will mitigate late payment interest charges
  6. If you disagree with HMRC’s decisions, closure notices or assessments, then get help to appeal them within 30 days of the date they were issued
  7. If you will struggle to pay what you owe and you need time to pay, ask now – don’t wait for HMRC to use bailiffs, insolvency powers, etc.

Helen Adams TEP is Tax Principal at BDO LLP in London, UK

Why is HMRC investigating my deceased relative’s tax affairs?

Posted on By Louise Polcaro
tax,investigation

When a person dies, their relatives have to deal with the process of obtaining probate, filing tax returns and distributing any assets in accordance with either intestacy rules, the deceased’s wishes or any subsequent deeds of variation. At what can be a difficult time, it can sometimes come as a shock if HMRC then opens an enquiry or investigation into your deceased relative’s UK tax affairs.

Why are HMRC investigating?

Such enquiries or investigations may arise if the deceased’s assets, as disclosed on the inheritance tax form, exceed those which HMRC expected, based on its knowledge of the deceased’s income and gains. In these circumstances, HMRC is likely to check to ensure the deceased properly declared all their income and gains in their lifetime.

In addition, HMRC may already be conducting enquiries into the deceased’s personal tax position, for example if they used a tax avoidance arrangement during their lifetime.

HMRC holds lots of data on people’s income and assets in its computer system, CONNECT. If the deceased’s inheritance tax return looks incomplete then CONNECT may identify this and trigger an investigation.

What are the timescales?

Where no self-assessment enquiries are open, HMRC has four years after the end of the tax year in which the deceased passed away to assess any income tax or capital gains tax liabilities. However HMRC may assess six years’ tax if the deceased or anyone acting for them before their death made careless or deliberate errors or omissions.

HMRC may use its information powers to obtain the data necessary to quantify and assess this tax and, if necessary, any additional inheritance tax liabilities plus late payment interest.

Will there be penalties?

HMRC is unable to issue penalties for errors made by the deceased during their lifetime. However if the returns it is investigating were submitted after the deceased’s death then penalties may be due.

What to do if you notice any errors

If an executor realises that the deceased’s tax returns and/or an inheritance tax return is incorrect then it is advisable to obtain advice from a specialist so that an appropriate disclosure is made to HMRC quickly.

A disclosure will inform HMRC of the error or omission in the return(s) and quantify the tax due. Correcting issues swiftly should minimise any penalties and bring peace of mind to those due to inherit assets.

Advice should be sought on the best method to make a disclosure, particularly where it may affect the UK tax affairs of a trust or person who is still alive, as well as the deceased.

Helen Adams TEP is Tax Principal at BDO LLP in London, UK

I made a mistake on my tax return; what now?

Posted on By Louise Polcaro
mistake,tax return,hard

Mistakes are part of life. No one likes to make them and it always feels better once they are corrected. Mistakes with your tax can seem daunting, but they can always be fixed.

If you failed to submit a tax return

If you failed to submit a tax return then the first question to ask is ‘did HMRC ask you to submit tax returns for all the year(s) you are worried about’? If so, then you may be able to fill them in and submit them anyway.

The filing date for an online tax return is currently 31 January after the end of the tax year. You can submit personal tax returns for up to three years after the filing date. HMRC will charge you late payment interest and penalties as well as the tax.

Making a voluntary disclosure

If you have more years’ returns to submit, never received any communication from HMRC asking you to submit tax returns or realised that you did not include all your income, profits or gains in your tax return then you need to make a ‘voluntary disclosure’.

A voluntary disclosure is a process by which you tell HMRC what income, gains and profits need to be taxed so that they can assess what you owe before you pay the tax and any late payment interest. Depending on what went wrong, you may also need to pay some penalties.

Making a voluntary disclosure before HMRC finds out and opens an enquiry or investigation usually results in lower tax-geared penalties and minimises the risk of prosecution or having your details published. It is often a simpler process too, compared to a full investigation.

Don’t think HMRC will find out? Think again…

If you doubt HMRC will find out – think for a moment about HMRC’s new computer system called CONNECT, which holds data on everyone including details of bank interest, salaries, etc. Soon this will automatically annually receive data on bank interest and balance from banks outside the UK. The computer identifies people for HMRC to investigate.

Seek help

As soon as you realise you need to correct your tax affairs, appoint an experienced advisor who is used to helping people in situations similar to yours. They will advise you on your options for making a disclosure, depending on your specific situation and why the problem arose.

Tax rules are complicated, so please get advice rather than trying to use HMRC’s Digital Disclosure Service yourself. An advisor can also guide you as to what penalties to expect and whether you may be able to get them suspended, as well as resolving other related issues, VAT issues, for example. They should also be able to negotiate time to pay if you cannot afford to pay HMRC in full immediately.

Helen Adams TEP is Tax Principal at BDO LLP in London, UK