Welcome to SPI-tax

The Let Property Campaign is an opportunity for landlords who owe tax through letting out residential property, in the UK or abroad, to get up to date with their tax affairs in a simple way and take advantage of the best possible terms.

I have dealt with a number of disclosures to HMRC using this campaign and in the majority of cases these have been processed by HMRC without the need for any follow-up information.

Knowing what to include in a Let Property Campaign disclosure, including the number of years to disclose and any penalty that should be offered within the settlement is hugely important in demonstrating to HMRC that the adviser has the professional knowledge and competence to deal with the Disclosure.  I can help you and your clients make these disclosures.

Sometimes a person gets behind with their tax affairs - a lack of tax knowledge, a divorce or an addiction, can be just some of the reasons that lead to sources of income/gains not being notified to HMRC, tax returns not being filed on time or tax not being paid on time.

Thankfully there are ways to regulate a person's tax affairs in a reasonable straightforward manner.  However, as with any interaction with HMRC, it is important that you fully understand the tax legislation and how to apply it, the processes for making a disclosure (which will often  depend on the subject matter of the disclosure), how it occurred and the behavioural characteristics of the person which lead to the disclosure now being made.

I have dealt with many voluntary disclosures to HMRC, advising on the way in which the disclosure is made, compiling the disclosure and agreeing a settlement with HMRC.  Remember, just because a disclosure is voluntary does not guarantee that HMRC will not open a criminal investigation, so it is important that the adviser understands the options that are available before ploughing forward with a disclosure.  

Even with a voluntary disclosure, any settlement with HMRC is still likely to encompass the outstanding tax, interest and a penalty.  Although where a full and complete disclosure of the facts has been made to HMRC it is possible to secure lower penalties based on the disclosure being unprompted by HMRC.

Don't get caught out trying to make a disclosure without first fully understanding the options available and the potential ramifications.  I can help with these decisions and assist with the disclosure and ultimate settlement with HMRC.

  

In cases where HMRC have decided not to pursue a criminal investigation they may instead decide to investigation using the Code of Practice 9 investigation of fraud procedure.

Under the Code of Practice 9 procedure, HMRC will give a taxpayer the opportunity to enter into a Contractual Disclosure Facility ('CDF') to make a complete and accurate disclosure of all their deliberate and non-deliberate conduct that has led to irregularities in their tax affairs.

By entering into a CDF and in exchange for the taxpayer's full disclosure of all irregularities HMRC will not pursue a criminal investigation into the conduct that they disclose.  This is the only facility that provides such a guarantee of immunity from prosecution.

In accepting the offer for a CDF, the taxpayer is required to provide HMRC with a valid Outline Disclosure within 60 days of the date the taxpayer receives HMRC's offer of the CDF (this is the same date as the time given for taxpayer to decide whether to accept or reject HMRC's offer.)

The Outline Disclosure must set out sufficient information including, but not limited to: 

• what the taxpayer did 

• how the taxpayer did it 

• the involvement of other people and entities 

• how the taxpayer benefited from the deliberate conduct 

This has to be completed  for each separate tax loss brought about by the taxpayer's deliberate conduct.

Where the taxpayer's Outline Disclosure does not disclose all tax losses brought about by their deliberate conduct, then HMRC may start a criminal investigation into any deliberate conduct that has not been disclosed.  It is therefore of the utmost importance that any disclosure made is a complete and accurate disclosure of all irregularities.

In more straightforward cases, where the Outline Disclosure confirms what HMRC suspected and as long as HMRC think that no additional information is needed, they will proceed  as follows: 

•  with the taxpayer's assistance HMRC will look to agree the additional duties, the interest payable and any penalty that is due 

•  the taxpayer will be asked to make their Formal Disclosure - this means that they will need to certify that they have made a full and complete disclosure of all the tax irregularities that they have been involved in by giving HMRC the following  

–  a certified statement of worldwide assets  and liabilities  

– a certificate of bank accounts operated  

– a certificate of credit cards operated  – 

a Certificate of Full Disclosure 

•  The taxpayer will then be invited to make a financial offer to cover the tax, interest and appropriate penalties to settle the investigation.

However, in complex cases, more work or additional information will be necessary to complete the investigation.

Where this is the case, the taxpayer will need to arrange for a Disclosure Report to be prepared. 

The nature and content of the Disclosure Report will depend on the individual circumstances of the taxpayer's case, but HMRC expect the taxpayer to agree the scope of the report with them prior to the work starting. Depending on the circumstances of the case, HMRC may ask the taxpayer to attend a meeting to discuss the scope of the Disclosure Report. In other cases, it may be enough for HMRC to meet the adviser to discuss what needs to be done.

If the taxpayer do not believe that they have brought about a loss of tax through their deliberate conduct they can sign and return the CDF Rejection Letter, within the same 60-day period. 

HMRC will consider any explanations or documents that support the rejection. Taxpayers should only choose the rejection route if they genuinely believe that they have not brought about a loss of tax through their 'deliberate conduct'.  By signing the Rejection Letter, HMRC will start its own investigation which can be a criminal investigation. 

Code of Practice 9 has changed over the years and I have been involved in assisting accountants, solicitors and their clients over the past 15 or so years.  I have dealt with many Outline Disclosure and prepared a large number of Disclosure Reports over the years.

If your client has received a Code of Practice 9 letter, get in touch.  I can help but time is of the essence in the initial stages.