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Facing a tax investigation? Need to make a disclosure to HMRC? Don’t worry. One of our team will be able to help. Just get in touch.

At the start of 2013, HM Revenue & Customs (HMRC) negotiated a number of disclosure facilities, one each with the Crown Dependencies of Jersey, Guernsey and the Isle of Man.

The MDF was a means for any taxpayer to resolve a UK tax liability arising from an asset held in the Isle of Man.  The MDF was available to individuals, trusts or companies and was originally available from 6 April 2013 until 30 September 2016 but was closed early on 31 December 2015.

To qualify for the MDF a taxpayer could not be linked to another HMRC disclosure facility, and must not have previously been the subject of a criminal investigation.

As the Isle of Man is a Category 1 country, so far as penalties are concerned, failure to remedy any tax compliance failure could have resulted in penalties of 100% of the tax (again) as part of any Settlement, plus interest.

The key terms of the MDF

Under the MDF, a taxpayer was required to:

  • make a Disclosure within 6 months of being registered under the JDF
  • disclose irregularities from commencement or back to 6 April 1999, whichever was shorter
  • pay
    • all taxes at the prevailing actual rates
    • interest on all tax paid late
    • a penalty capped at 10% of the tax due for the 10 year period ending 5 April 2009, thereafter 20%
    • higher penalties of 30% for 2010/2011 onwards as the inaccuracy related to a Category 1 country
  • make a payment within 30 days of the application date
  • disclose all their assets and liabilities as at 5 April prior to the date of disclosure
  • be told whether their disclosure was accepted within 9 months

What taxes were covered?

Under the MDF, the following taxes were covered:

  • Value Added Tax
  • Corporation Tax
  • Employment taxes (PAYE, Employees NIC and Employers NIC)
  • Inheritance Tax
  • Capital Gains Tax

How was Haines Watts able to help?

Haines Watts was able to:

  • Register those who wished to make a disclosure to HMRC under the terms of the MDF
  • Manage the process throughout for them
  • Discuss matters with HMRC initially on a no name basis
  • Agree with HMRC in advance how matters were to be treated
  • Calculate the potential tax liability
  • Determine how matters would be treated and taxed with HMRC
  • Discuss with the taxpayer how to proceed with the disclosure
  • Submit a Report with all the relevant forms completed
  • Negotiate a full and final Settlement with HMRC as necessary

If you wish to discuss this or any other matter with a member of the team, please contact us.

If you cannot find the information you need on our website, please contact Paul Malin or Andy Maxfield using our contact form or email directly to pmalin@hwca.com or amaxfield@hwca.com

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Birmingham

Haines Watts Birmingham
Sterling House
71 Francis Road
Edgbaston
Birmingham
B16 8SP

Leeds

Haines Watts Leeds
Sterling House
1 Sheepscar Court
Meanwood Road
Leeds
LS7 2BB

London

Haines Watts London
New Derwent House
69 – 73 Theobalds Road
London
WC1X 8TA

Our addresses

Birmingham

Haines Watts Birmingham
Sterling House
71 Francis Road
Edgbaston
Birmingham
B16 8SP

Tel: 0121 456 1613

Leeds

Haines Watts Leeds
Sterling House
1 Sheepscar Court
Meanwood Road
Leeds
LS7 2BB

Tel: 0113 3981100

London

Haines Watts London
New Derwent House
69 – 73 Theobalds Road
London
WC1X 8TA

Tel: 0207 025 4650