TAX DISCLOSURES & CORRECTIONS
Tax Disclosures & Historic Tax Corrections
Have you received income that was not previously reported to HMRC, discovered an error in an earlier tax return, or missed a tax relief you may have been entitled to claim?
CJC Accountancy helps individuals review historic tax matters, calculate outstanding liabilities and make appropriate disclosures or claims to HMRC.
Led by Chris Clark, Fellow of the AAT (FMAAT) · AAT licensed practice · Reviewed on Trustpilot
WHEN YOU MIGHT NEED HELP
When might you need this service?
Historic tax problems take many forms. Some mean more tax is due; others mean tax was overpaid or a relief was missed. Not every correction needs a formal disclosure – the right route depends on what went wrong, the tax year, whether a return was submitted and the relevant claim or assessment rules.
Undeclared rental income
Rent from a UK or overseas residential property that was never reported to HMRC.
Other omitted income or gains
Employment or other income left off an earlier return, or capital gains that were not reported correctly.
Errors in submitted returns
Mistakes in an earlier Self Assessment return, including tax years outside the ordinary amendment window.
Capital losses never claimed
An allowable capital loss that was never notified to HMRC.
Overpaid tax or missed reliefs
Income Tax or Capital Gains Tax paid in error, or a missed EIS or SEIS relief claim.
A letter from HMRC
Correspondence from HMRC about income or gains that have not been declared.
VOLUNTARY DISCLOSURE
Bringing undeclared income up to date
Many people who need to make a disclosure didn’t realise the income was taxable, or misunderstood the rules. We start by establishing the facts, not by assuming the worst. We help you work out:
which income or gains should have been reported
which tax years need reviewing
whether a disclosure is required
the tax and interest potentially payable
the penalty provisions that apply
how to approach HMRC with a complete, supported disclosure.
Coming forward voluntarily, before HMRC contacts you, may improve the penalty position. It does not guarantee a reduced or nil penalty, and any tax and interest are still payable.
HMRC disclosure routes
Let Property Campaign: for appropriate cases involving undeclared residential letting income, including eligible UK and overseas residential property.
Worldwide Disclosure Facility: for relevant offshore tax non-compliance, where that route is appropriate.
Digital Disclosure Service and other procedures: for other undeclared liabilities, using the correct statutory and HMRC process.
Overseas rental income doesn’t automatically mean the Worldwide Disclosure Facility. We consider which route fits your circumstances.
ILLUSTRATIVE SCENARIO
Clara Correction: rental income from an apartment abroad
Fictional example for illustration only.
Clara is a long-term UK resident who owns an apartment overseas. She has rented it out for several years but assumed that, because the property was abroad, the income did not need to appear on her UK tax returns.
Clara subsequently discovers that overseas rental profits may also need to be reported in the UK.
She wants to understand whether she has underpaid tax, which years need reviewing and how to put the position right with HMRC.
How CJC can help Clara
Review her residence and tax-reporting position
Examine the rental income and allowable expenses
Consider any relief for foreign tax paid
Identify the relevant years and disclosure route
Calculate the potential historic liabilities
Prepare a supported disclosure and help with HMRC correspondence
The appropriate treatment, relevant tax years and any penalties depend on Clara’s individual circumstances.
PENALTIES
How does HMRC calculate penalties?
Penalties depend on the behaviour involved and on whether the disclosure is unprompted or prompted. A disclosure is usually prompted if it’s made when you have reason to believe HMRC has discovered, or is about to discover, the problem.
| Behaviour | Unprompted disclosure | Prompted disclosure |
|---|---|---|
| Careless | 0%–30% | 15%–30% |
| Deliberate but not concealed | 20%–70% | 35%–70% |
| Deliberate and concealed | 30%–100% | 50%–100% |
Different penalty rules may apply if a person failed to notify HMRC of a tax liability, where offshore matters are involved, or for certain earlier tax years. Penalties are generally calculated by reference to the potential tax lost, not the gross income received.
OVERSEAS INCOME AND ASSETS
When offshore matters are involved
Where undeclared income or gains relate to overseas assets, additional rules may apply. Depending on the circumstances, tax year, territory and behaviour involved, penalties can be significantly higher than the standard UK ranges. We assess the relevant legislation before advising on the disclosure.
Certain offshore penalties can reach 200% of the potential lost revenue. That is the maximum for the most serious cases, not the normal outcome in every offshore case.
Can cooperation with HMRC reduce a penalty?
Telling HMRC what went wrong Up to 30%
Helping HMRC establish the facts Up to 40%
Giving HMRC access to relevant records Up to 30%
HMRC considers the quality and timing of a disclosure when calculating any applicable penalty reduction. Cooperation can be important, but it does not automatically remove penalties or outstanding tax and interest.
These are HMRC’s weightings for disclosure quality within the available penalty reduction, not reductions in the tax itself. For some offshore matters, HMRC also expects additional information.
| Issue | General time limit |
|---|---|
| Amending a Self Assessment return | Usually 12 months after the normal statutory filing deadline |
| Notifying HMRC of an allowable capital loss | 4 years after the end of the tax year of disposal |
| Claiming overpayment relief | Generally 4 years after the end of the relevant tax year |
| Claiming EIS/SEIS Income Tax relief | Generally, five years after 31 January following the tax year in which the shares were issued or are treated as issued under an applicable carry-back election |
These are general deadlines. Different rules, exclusions and claim procedures can apply, including where returns were issued late or a relief has its own statutory conditions. An expired return-amendment deadline does not necessarily prevent a separate valid claim.
OTHER CORRECTIONS
Other reasons you may need to correct an earlier tax year
Not every historic tax problem involves undeclared income. We can also help with claims and corrections where you may have paid too much tax or missed a relief.
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A previously unreported capital loss may still be available for notification to HMRC within the applicable claim period. Allowable losses can be relevant when calculating Capital Gains Tax liabilities in the same or later tax years.
Not every fall in value is an allowable capital loss, and losses reduce gains rather than producing a cash refund.
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If an earlier tax return resulted in too much Income Tax or Capital Gains Tax being paid, an overpayment-relief claim may be available after the normal amendment deadline.
The relief has exclusions – for example, it can’t generally be used for a claim that was never made – so we check the right route before suggesting a claim.
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Some investment tax reliefs have longer claim periods than ordinary tax-return amendments. For qualifying EIS and SEIS investments, Income Tax relief can generally be claimed up to five years after the relevant 31 January filing deadline. The relevant year depends on when the shares were issued and whether relief is carried back.
The investment must meet the scheme conditions, and you need the company’s compliance certificate (EIS3 or SEIS3). Making a new claim is different from correcting relief claimed in the wrong tax year – we check which applies and how HMRC needs the claim to be made.
HOW CJC CAN HELP
How we help you put things right
We provide tax and accountancy support within an agreed engagement. HMRC decides whether to accept a disclosure, treatment or penalty proposal, so no outcome can be guaranteed. We don’t provide criminal defence, litigation or legal advice; if your case needs a solicitor, we’ll tell you.
01
Review
We examine the relevant tax years, correspondence, income sources and historic returns.
02
Calculate
We assess the correct liabilities, reliefs, available claims and potential interest or penalties.
03
Prepare
We determine the appropriate disclosure or claim route and prepare the necessary supporting information.
04
Support
We assist with HMRC submissions, queries and correspondence within the agreed engagement scope.
FAQ
Questions about disclosures and corrections
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Usually, yes. How many years need to be covered depends on the facts – including why the income wasn’t reported – and on HMRC’s powers and time limits for each year. We review this with you before anything is submitted.
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If you are UK resident, overseas rental profits may need to be reported in the UK, even if the income is also taxed abroad. Your residence position for each year and the relevant UK rules need checking, together with any relief for foreign tax paid.
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It depends on the behaviour involved, the timing, whether HMRC has already contacted you and the quality of the disclosure. In some cases there’s no penalty. In others, an unprompted, complete disclosure generally leads to a lower penalty than one made later. Any tax and interest are still payable.
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Professional support can still help. Because HMRC has made contact, a disclosure may be treated as prompted, and different procedures may apply. It’s important to respond within the time HMRC gives you.
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Possibly. Other correction procedures or separate statutory claims may still be available. However, not every historic issue can be corrected or refunded, so we’ll explain what’s realistic for your situation.
Need to correct an earlier tax year?
Whether you have undeclared rental income, an incorrect tax return or a missed tax relief, we can review your circumstances and explain the appropriate next steps.
Tax disclosure and historic tax correction work is individually quoted according to the circumstances and complexity involved.