Worldwide Disclosure Facility: declaring overseas income or gains

The Worldwide Disclosure Facility is HMRC's route for putting right a UK tax liability that relates wholly or partly to an offshore issue. Anyone in that position can use it, and you can make a disclosure for all tax years up to and including 2024 to 2025¹.

It is not a form you fill in and forget. You notify HMRC first, and once you have the notification acknowledgement quoting your Disclosure Reference Number, you have 90 days to gather information, calculate what you owe and complete the disclosure¹. The facility opened on 5 September 2016¹.

The point of using it is the penalty. Independent guidance is clear that if you approach HMRC voluntarily, penalties are often reduced, and that if you go to HMRC to disclose your income voluntarily, it is extremely unlikely that you will be prosecuted². That is the trade: you come forward, you pay what is owed plus a penalty, and the risk of something worse falls away.

Who can use the Worldwide Disclosure Facility

The test is about the liability, not the person. Anyone who wants to disclose a UK tax liability that relates wholly or partly to an offshore issue can use the facility¹. That covers a wide range of circumstances: a UK resident with a foreign bank account that has never been declared, someone with overseas property income, and people whose affairs have become more complicated than they realised.

Living outside the UK does not close the door. What changes is which years and which income are in scope, because that turns on your residence position. The Statutory Residence Test is the framework HMRC uses to work out whether you are resident in the UK for a tax year, and it is the starting point for anyone who has moved or split their time between countries³. If you have left the UK, your liability for a given year depends on that test rather than on where you happen to be now.

The facility is specifically for offshore issues. If what you have not declared is UK income with no offshore element, this is the wrong route, and the general rules on undeclared income are where to look instead. If you are unsure which side of the line your case falls, that is a question worth resolving before you notify, because the 90-day clock starts when HMRC acknowledges your notification.

What you can disclose: offshore income, gains and tax years covered

The facility takes all tax years up to and including 2024 to 2025¹. That is the outer limit of what can go into a single disclosure.

The kinds of income that count as foreign income for UK tax purposes are set out in HMRC's own helpsheet. They include profits of a trade carried on wholly outside the UK, a UK resident partner's share of overseas trade profits, overseas property business profits, dividends from non-UK resident companies, interest such as on a foreign bank account, and foreign pension income other than disqualified income⁴. That list is not exhaustive, but it shows the shape of what belongs in a disclosure.

Gains have their own reporting rules. A gain on a foreign life insurance policy should be reported in the Foreign section of the tax return, under 'Other overseas income and gains'⁵. Capital gains and offshore income gains also fall within the scope of the temporary non-residence rules, alongside certain pension payments and lump sums, income taxable under the disguised remuneration rules, remitted foreign income for remittance basis users, distributions from closely controlled companies, and loans to participators that are written off or released³.

Getting the figures right matters as much as identifying the sources. Independent guidance on foreign income sets out that a person needs details of each source of income from overseas, the country where the income is received, and the gross amount in UK sterling of each amount received⁶. Gross means before foreign tax is taken off, and sterling means converted, not left in the original currency.

How to make a disclosure: notify, then 90 days to complete

The process has two stages, and the first one starts the clock.

1. Notify HMRC of your intention to make a disclosure.
2. Receive the notification acknowledgement quoting your Disclosure Reference Number.
3. Use the 90 days that follow to gather information, calculate liabilities and complete the disclosure¹.

The 90 days is not a target, it is the deadline. HMRC's guidance states that you must make your disclosure within 90 days after getting the notification acknowledgement quoting your DRN¹. The same 90-day figure appears in the first stage of the process, described as the period to gather information, calculate liabilities and complete the disclosure after notifying¹.

The practical consequence is that the work should happen before you notify, not after. Records for old tax years take time to assemble, particularly where a foreign account has been closed or a provider has changed hands. If you notify first and then discover that a source of income is hard to document, you are working against a fixed deadline.

Paying what you owe and what HMRC does next

The disclosure establishes what is owed. Payment is a separate matter, and HMRC's approach to collection is set out in independent guidance: HMRC will usually try to agree a payment plan first, but you need to speak to them about what steps to take⁷. That is the route for anyone who cannot clear the bill in one payment.

Income Tax in the UK is administered by HMRC⁸. Where HMRC already holds information about your income, it may use it to check what you have paid: at the end of each tax year, HMRC checks how much tax you have paid using information from employers, pension providers, banks and building societies⁹. That matters for a disclosure, because it means HMRC may already have data pointing at an offshore account even before you come forward. Coming forward voluntarily is a different position from being found.

There is also a wider compliance backdrop. HMRC does not tell you if your return has been selected at random for a check¹⁰, so the absence of a letter is not evidence that nothing is happening. If you are already under enquiry, that is one of the circumstances in which HMRC says it may charge a higher penalty¹.

If you cannot pay, the consequences escalate in a defined order. HMRC will usually try to agree a payment plan first⁷. Beyond that, unpaid tax can lead to enforcement, and independent guidance on tax debt sets out what happens at each stage⁷.

Penalties: what reduces them and what makes them higher

The penalty is where the decision to come forward pays off, and where the timing matters most.

Independent guidance states that if you approach HMRC voluntarily, penalties are often reduced². The same guidance notes that penalties under HMRC campaigns are often lower than they would be otherwise². Both point the same way: the earlier and more voluntarily you act, the better the penalty position.

HMRC's own guidance sets out when the opposite applies. HMRC will treat disclosures differently and may charge a higher penalty when the taxpayer is already under enquiry, when the disclosure is connected to a previous inaccurate disclosure or settlement, or when existing legislation on calculating penalties is not followed¹. Those three circumstances are worth reading carefully against your own position before you notify, because they determine whether you are in the reduced-penalty group or not.

The prosecution question is separate from the penalty question. Independent guidance is that if you go to HMRC to disclose your income voluntarily, it is extremely unlikely that you will be prosecuted². That is a statement about voluntary disclosure specifically, not about undeclared income in general.

Where a disclosure involves Inheritance Tax, the reporting rules sit outside the facility. If an estate owes Inheritance Tax, its value must be reported within one year using form IHT400¹¹. Inheritance Tax can be paid in yearly instalments, and you can pay off the full tax and interest at any time by writing to HMRC asking for a final assessment¹². A change to Inheritance Tax reporting for non-taxpaying trusts takes effect from 6 April 2027¹³.

Where to get help

Tax is one of the areas where free, impartial advice exists and is worth using before you notify, because the 90-day window is not generous and the penalty depends on getting the framing right.

TaxAid is a charity that advises people on tax problems, including never-declared income and problems paying tax debt². Its guidance on foreign income covers what you need to have ready⁶. For anyone whose disclosure involves a business, Business Debtline covers non-priority debts and the pre-action protocol in the county court in England and Wales¹⁴.

If your circumstances involve benefits as well as tax, the rules differ across the UK. The Scottish Welfare Fund has its own guidance¹⁶, and the Discretionary Assistance Fund operates in Wales¹⁷. In Northern Ireland, nidirect covers tax and allowances in retirement¹⁸.