Tax returns may be wrong for all sorts of reasons, from innocent mistakes to deliberate fraud. Whatever the reason, if you are aware that your tax return is incorrect, it is always best to make a disclosure and sort it out.
If you are not under enquiry by HMRC there are major advantages to an unprompted disclosure, including avoidance of prosecution, big discounts on penalties, and securing HMRC’s goodwill in the whole process of reaching a settlement (thereby saving you further costs on professional fees and your own time).
If you are already under investigation by HMRC, or have received an initial enquiry, it is not too late to make a disclosure. In fact, it is to your advantage that you disclose any problems as soon as possible. Giving misleading or incorrect information to HMRC during the course of an investigation is a serious mistake, leading to increased financial penalties or the risk of criminal prosecution.
There is a formal regime for correction of VAT errors, but no equivalent scheme for the other main taxes. However, the VAT procedure is not always straightforward and in any event does not protect you from the possibility of a penalty or an ensuing investigation.
How we can help
Despite the many advantages, the decision to make a disclosure is often a very hard one to make. In our experience, clients often have unfounded fears about the consequences of a disclosure. We understand all the issues you are facing, and have guided many clients through the disclosure process to a successful outcome. We do not make judgements about how the tax came to be owed – we simply sort things out for you.