The Worldwide Disclosure Facility: disclosing offshore income to HMRC

What the Worldwide Disclosure Facility is

The Worldwide Disclosure Facility, usually shortened to WDF, is HMRC’s route for anyone who needs to disclose a UK tax liability that relates wholly or partly to an offshore issue. HMRC’s guidance describes offshore issues as:

• income arising from a source outside the UK
• assets situated or held outside the UK
• activities carried on wholly or mainly outside the UK
• anything that has effect as if it were income, assets or activities of those kinds

It also covers money connected to unpaid UK tax that has been moved abroad. In practice that takes in undeclared foreign income such as interest on an overseas account or rent from a property abroad, a gain on foreign shares, and UK income that was taken offshore.

The WDF is a way of disclosing, not a separate set of rules. Tax, interest and penalties are worked out under the ordinary legislation, and its offshore provisions are what make these cases different. Our page on voluntary disclosures covers the general route and the Digital Disclosure Service; this page covers what changes offshore.

Who it is for, and when it is not the route

HMRC’s guidance opens the facility to individuals, companies, trusts and estates, with a separate notification for each person or company. People who are not UK resident can still disclose through it. Typical cases include:

• a UK resident whose income from an overseas account, investment or property never reached a UK return
• someone who sold an asset abroad without reporting the gain
• a former user of the remittance basis (replaced on 6 April 2025 by the four-year foreign income and gains regime) whose remittances were not dealt with correctly
• a company or trust with UK tax at stake on offshore income or assets

It is not always the right route.

• Where the conduct may have been deliberate, the Contractual Disclosure Facility under Code of Practice 9 is the other route to weigh. HMRC’s guidance says it is the only way of disclosing that carries an assurance against a criminal investigation into the conduct disclosed. See our page on COP9 and the Contractual Disclosure Facility.
• Where the only undeclared income is from residential letting, HMRC’s guidance points to the Let Property Campaign instead.
• Where HMRC already has an enquiry open, the investigating officer decides whether a disclosure can be accepted.
• Where HMRC knows or suspects that the assets are criminal property, it can refuse the application.

How a WDF disclosure works

1. Notify. Notification is made through HMRC’s Digital Disclosure Service. HMRC issues a disclosure reference number and a payment reference.
2. Prepare. From HMRC’s acknowledgement there are 90 days to calculate the tax, interest and penalties and complete the disclosure. In complex cases a further 90 days can be requested, to 180 in total.
3. Disclose and pay. The disclosure is submitted with payment in full. If that is not possible, HMRC expects payment arrangements to be agreed before submission, not after.

The disclosure asks for more than the figures: a self-assessment of the behaviour behind each failure, which decides how many years must be covered; the income and gains for each year, source by source; the maximum value of assets held outside the UK over the last five years; and up to three main jurisdictions. Any reading of the law that reduced the amount disclosed has to be explained, and the disclosure ends with a commitment that it is full, given in the knowledge that a false one could lead to prosecution.

The facility currently covers tax years up to and including 2024-25. Where HMRC has sent a return for 2022-23 or later that is still outstanding, that return is filed instead. HMRC acknowledges a completed disclosure within 15 days and aims to set out its intended course of action within 90 days of that. If it cannot accept the disclosure, it can open or resume an enquiry, or ask for more information. Because the clock starts at notification, the scoping should come first: overseas records are not always quick to obtain.

How offshore penalties are set

The penalty for an inaccuracy in a return, or for failing to tell HMRC that tax was due, is a percentage of the tax at stake, the potential lost revenue. Offshore, the range also depends on the territory involved. Territories are grouped by how readily they share tax information with the UK: the Treasury designates category 1 and category 3 territories by order, and any other territory is in category 2. Domestic matters are category 1.

Category 2 maximums are one and a half times the category 1 figures, and category 3 maximums are double. The higher categories apply only where the tax at stake is income tax, capital gains tax or inheritance tax; an offshore error in another tax, such as corporation tax, stays in category 1. Which list of territories applies depends on when the failure occurred.

Within each range, the quality of the disclosure decides where the penalty lands. For a deliberate offshore inaccuracy, that includes giving HMRC additional information, such as who encouraged, assisted or otherwise facilitated the conduct. For 2016-17 and later years, the minimum penalties for deliberate offshore behaviour also rose by ten percentage points in every category, so a deliberate category 1 inaccuracy disclosed unprompted cannot fall below 30%, against 20% before. Careless minimums did not change. Our guide to careless and deliberate penalties explains the reductions.

Deliberately understated UK income or gains can be drawn into the same regime. Where the income, or a disposal’s proceeds, was received or moved abroad before the return was filed, the legislation treats it as an offshore transfer.

Further offshore sanctions

Two further penalties apply only in serious offshore cases, on top of the ordinary one.

• The offshore asset moves penalty is an extra 50% of the original penalty. It can apply where that penalty is for deliberate conduct and, after 26 March 2015, assets were moved from a territory specified in regulations to one that is not, or their ownership was rearranged, with a main purpose of preventing or delaying HMRC finding the failure.
• The asset-based penalty applies for 2016-17 and later years where the conduct was deliberate, the tax includes capital gains tax, inheritance tax or income tax on income from an asset such as rent, interest or dividends, and the offshore tax at stake exceeds £25,000 in a tax year. It starts at the lower of 10% of the asset’s value and ten times the offshore tax at stake, reduced for disclosure.

Since 6 April 2017 it has also been a criminal offence to fail to notify, fail to file, or file an inaccurate return where that leaves more than £25,000 of tax due on offshore income or gains for a tax year. It does not require proof of intent, though there are defences, including reasonable excuse. HMRC’s guidance says it does not apply where the income or gains are reported to HMRC under the Common Reporting Standard.

The Liechtenstein Disclosure Facility and the other closed facilities

Before the WDF, HMRC ran offshore disclosure facilities on special terms. The best known was the Liechtenstein Disclosure Facility, or LDF, which followed a memorandum of understanding between HMRC and the Government of Liechtenstein signed on 11 August 2009. It was for UK taxpayers who held investments in Liechtenstein when they registered, and HMRC’s guidance on it set out terms that are not available today: the penalty would normally be limited to 10% for years before 2009, the disclosure went back to 1999, and someone who made a full disclosure would not be prosecuted. Three similar facilities covered assets in the Isle of Man, Guernsey and Jersey.

All of them closed to new applications on 31 December 2015. HMRC’s guidance says that until then it offered incentives to come forward, and the WDF, which opened on 5 September 2016, carries none of those terms: there is no fixed penalty rate, and the offshore penalties, time limits and the failure-to-correct penalty described on this page apply in the ordinary way. Anything left out of an old facility disclosure, or arising since, is now disclosed through the WDF on those terms.

The Requirement to Correct and the failure-to-correct penalty

The Requirement to Correct applied to anyone who, at the end of the 2016-17 tax year, had offshore non-compliance in income tax, capital gains tax or inheritance tax that HMRC could still assess. It had to be put right between 6 April 2017 and 30 September 2018, whether through a return, HMRC’s disclosure services or another method agreed with HMRC.

Where that did not happen, the failure-to-correct penalty is 200% of the tax. It can be reduced for the quality of the disclosure, but not below 100% unless HMRC accepts there are special circumstances, and an inability to pay is not one. There is a reasonable excuse defence, but it is narrow: advice from someone with an interest in the arrangements does not count, nor does advice that ignored the person’s own circumstances, nor a lack of funds unless it arose from events outside their control. The asset-based and asset moves penalties can apply on top. For undeclared offshore income or gains from before April 2017, this is a question to settle before HMRC is notified.

How far back an offshore disclosure goes

The ordinary limits depend on behaviour: four years from the end of the tax year where reasonable care was taken, six for carelessness, and twenty for deliberate conduct or a failure to notify. For income tax and capital gains tax, offshore matters reach further. Where the lost tax involves an offshore matter, or an offshore transfer that makes it significantly harder to identify, HMRC can assess up to twelve years after the end of the tax year. Deliberate cases keep the twenty-year limit.

The twelve-year limit applies from 2013-14 where the loss was careless and from 2015-16 in other cases. It does not apply where, before the ordinary limit ran out, HMRC received information from overseas under exchange arrangements from which it could reasonably have been expected to become aware of the lost tax. Inheritance tax has a parallel twelve-year rule.

As an illustration, the earliest year the twelve-year limit still reaches for a careless offshore loss is 2014-15, which stays open until 5 April 2027. Our guide to how far back HMRC can investigate sets out the limits in full.

What is the Common Reporting Standard (CRS)?

CRS stands for the Common Reporting Standard: the OECD’s global standard for the automatic exchange of financial account information between tax authorities. Banks and other financial institutions find out where their account holders are resident for tax purposes, report accounts held by residents of other participating countries to their own tax authority, and that authority passes the information to the country where the holder lives. The first jurisdictions committed to exchanging under it from 2017.

For anyone with money abroad, what CRS means in practice is this: where a UK resident has an account in a participating country, HMRC receives the details from the tax authority there, every year, whether or not the account holder has told HMRC about it.

What is CRS in the UK?

The UK applies the standard through the International Tax Compliance Regulations 2015, which require UK financial institutions to collect, keep and report information for exchange. The first UK reporting year was 2016, and institutions report each calendar year to HMRC by 31 May of the following year. The exchange runs both ways: a UK bank reports to HMRC on customers who are tax resident in other participating countries, and HMRC passes that on. That is why a UK bank asks new customers where they are resident for tax purposes.

What do banks and other financial institutions report?

The institutions covered include banks, building societies, insurance and investment companies, and some trusts. For each reportable account, they report:

• the account holder’s name, address and tax identification number, and for an individual the date of birth and, in some cases, the place of birth
• the country where the holder is resident for tax purposes
• the account number, and the name and identifying number of the institution
• the balance or value of the account at the end of the year
• for a deposit account, the interest paid; for an investment account, interest, dividends, other income and the proceeds of sales or redemptions

The standard was updated from 1 January 2026, an update HMRC calls “CRS2.0”. It adds detail to the reports, such as the type of account, and the first reports under the updated rules are due in 2027.

How HMRC uses CRS information

HMRC first received data under the standard in 2017. In its 2019 offshore compliance strategy, it said it had built the data into Connect, its risk-analysis system, to check compliance and detect possible non-compliance, and that it had used data from the standard and other sources to write to people asking them to check they had paid the right tax. Those are the kind of letters described further down this page.

A UK resident whose overseas account has never appeared on a return should not assume HMRC is unaware of it.

FATCA, and crypto: the Cryptoasset Reporting Framework

The UK also exchanges information with the United States under FATCA. For cryptoassets, the OECD’s Cryptoasset Reporting Framework takes the same approach: from 1 January 2026, UK cryptoasset service providers have had to collect information on their users and their transactions, with the first reports due to HMRC by 31 May 2027. The UK rules cover UK-resident users as well as those resident in other participating countries. Our guide to HMRC crypto letters covers that side.

If HMRC has written about income or assets abroad

HMRC writes to people it believes may have income or assets abroad, often in what it calls “one to many” letters: the same letter to everyone in a group, asking them to check their returns and correct anything missing. HMRC’s WDF guidance says that someone who gets a letter about money or assets abroad, and finds that a disclosure is needed, should use the facility.

Two points follow. First, a disclosure made after a letter about the same matter is likely to be treated as prompted, which narrows the reductions available: the route stays open, but on different terms. Second, some letters enclose a certificate of tax position, typically a declaration that all offshore income and gains have been declared. It is a statement to HMRC, and should not be signed until the position has been checked. Our guide to nudge letters and the certificate of tax position explains the options. If you are not sure what kind of letter it is, start by identifying the letter.

UK expats and people who have moved abroad

Leaving the UK does not end the question. People who are not UK resident can still disclose through the WDF, and the issues can date from the years before departure: an overseas account opened while still UK resident, or income in a year when UK residence was assumed to have ended but had not. Residence is decided year by year under the statutory residence test, so the first job is to establish which years were UK-resident at all.

Not everything an expatriate needs to correct is offshore. Rent from a UK property is UK income wherever the landlord lives, and where that is the only undeclared income, HMRC’s guidance points to the Let Property Campaign. Our page for UK expats in the UAE covers the wider position, including returns, the non-resident landlord scheme and UK property disposals.

What we do

• Establish which years are open, including under the twelve-year offshore limit
• Settle the behaviour and territory category before anything is notified
• Check whether the failure-to-correct, asset-based or asset moves penalties are in point
• Rebuild the figures from overseas bank, investment and property records
• Confirm the WDF is the right route, or advise where another may fit better
• Handle the notification, disclosure and computations within the 90-day period
• Agree payment arrangements before submission where they are needed
• Put the penalty position to HMRC deliberately, and answer its follow-up questions

Further reading

• Voluntary disclosures and the Digital Disclosure Service
• HMRC penalties for careless and deliberate errors
• How far back can HMRC investigate?
• Nudge letters and the certificate of tax position
• HMRC’s deliberate tax defaulters list, and how disclosure affects it
• The statutory residence test explained
• HMRC Time to Pay arrangements