Making a Disclosure Using the Worldwide Disclosure Facility: The Step-by-Step Operational Process

You have an offshore matter to put right and you have decided the Worldwide Disclosure Facility is the route. What you do next determines what you pay: get the process right and you hold the lower penalty band, get it wrong and you hand HMRC reasons to push it to the top. Three steps run it (Notify, Disclose, Pay), and below them sit the disclosure-pack contents, the year-by-year computation format, the interest and penalty mechanics, and the HMRC post-disclosure review that runs from settlement payment to the final closure letter.

This assumes the route choice is settled in favour of WDF rather than CoP9 or the Let Property Campaign. For the regime itself, the FA 2017 Schedule 18 Failure-to-Correct overlay, the territory-category penalty framework, and worked penalty examples, the Worldwide Disclosure Facility and Failure-to-Correct page has the detail.

The three steps, in order

WDF runs as three sequential steps:

1. Notify HMRC via the gov.uk WDF service.
2. Disclose within 90 days of HMRC's acknowledgment (extendable to 180 days on application).
3. Pay the aggregate tax, interest and penalty figure on submission.

Each step carries its own discipline and its own paperwork. The usual mistake is to collapse the three into one, or to misread when each clock starts. The 90-day disclosure clock runs from HMRC's acknowledgment of your Notify, not from the day you first realised you had a matter.

Step 1: Notify HMRC

You submit the Notify via the gov.uk WDF service. It is a short form that sets out:

• Who you are (name, address, UTR or tax-reference number).
• Your intention to disclose under the WDF.
• A high-level indication of the matter: offshore rental income, offshore capital gains on a foreign property disposal, offshore investment income, offshore trust distribution, foreign-employment residual position, and so on.
• Whether the disclosure is unprompted (you have identified the matter and are volunteering it) or prompted (HMRC has issued a nudge letter or otherwise approached you first).

HMRC acknowledges typically within one to two weeks and issues a Disclosure Reference Number (DRN). The DRN is your case identifier for the rest of the process. The 90-day disclosure clock starts on the acknowledgment date.

Step 2: Disclose within 90 days

You must get the disclosure pack to HMRC within 90 calendar days of its acknowledgment of your Notify. The pack has five components.

(i) Narrative description of the matter

A clear written account of:

• The facts: when the position arose, what the income or asset is, how you acquired it, how it was used.
• The source documents you have identified (foreign bank statements, foreign property documents, foreign tax filings).
• The years in scope, with reference to the relevant discovery window (4-year under TMA 1970 s.34 for innocent error pre-2019, 6-year under s.36 for careless, 12-year under s.36A for offshore innocent error post-2019, 20-year under s.36(1A) for deliberate).
• Your behaviour categorisation: innocent error, careless, deliberate not concealed, or deliberate and concealed. This is the foundation for where your penalty band sits.

(ii) Year-by-year tax, interest and penalty computation

The expected HMRC format is per tax year, per tax type (income tax, capital gains tax, inheritance tax separately), per source. For offshore rental, a typical layout is:

• Tax year (for example 2018-19, 2019-20).
• Gross rental income in foreign currency converted to sterling at the appropriate rate.
• Allowable expenses per the UK rental-business rules.
• Net taxable income.
• UK tax due at the relevant marginal rate.
• Foreign tax paid (for double-tax credit, where applicable).
• Net UK tax due after credit.
• Interest from the original due date to the projected payment date.
• Penalty range proposal in percentage and absolute terms.

For offshore capital gains, the layout is similar with the disposal proceeds, allowable cost base, gain, annual exempt amount where available, taxable gain, and the CGT rate applied. Inheritance tax positions follow the IHTA 1984 computational mechanics where applicable.

(iii) Supporting documentary evidence

HMRC expects primary-source evidence wherever practical:

• Foreign bank statements for every year in scope (the single most-asked-for item).
• Foreign property purchase and disposal contracts.
• Foreign rental agreements and receipts.
• Foreign tax returns or certificates if filed in the foreign jurisdiction (essential to support double-tax credit claims).
• Foreign trust deeds and distribution records.
• Foreign company corporate filings.

Secondary evidence (your own reconstruction from memory plus indirect sources such as agent statements or letting platform records) is acceptable where primary sources cannot be obtained. Explain the gaps in the pack and the steps you took to fill them. Where HMRC has to accept secondary evidence, it typically widens the penalty band by one or two percentage points.

(iv) Penalty-band proposal with reasoning

Anchored to FA 2007 Schedule 24 and FA 2008 Schedule 41. The proposal should set out:

• The behaviour categorisation (careless, deliberate not concealed, deliberate and concealed) and the reasoning for it.
• The territory category (1, 2 or 3) per the SI 2011/976 designation, as amended.
• The relevant penalty range from the Schedule 24 paragraph 4 table.
• The disclosure-quality reductions claimed (unprompted full, prompted full, partial).
• The proposed final percentage and the absolute pound figure.
• Whether FA 2017 Schedule 18 Failure-to-Correct applies (for pre-30-September-2018 offshore non-compliance) with the 100 per cent floor on unprompted full disclosure.
• Whether the FA 2015 Schedule 21 50 per cent asset-move uplift applies.

(v) Settlement-payment commitment

A statement of intent to pay the aggregate tax, interest and penalty figure proposed, with a payment date. Where time-to-pay is requested, the request is included with supporting financial information.

What if 90 days is not enough?

Where 90 days will not cover the work, you request the extension to 180 days in writing. Your request should set out:

• The complexity of the matter: multi-jurisdictional positions, 12-year computations, trust structures, multiple sources.
• The steps you are taking to source records, with dates and milestones.
• Why particular records are not yet to hand (foreign bank closure, document retrieval from a foreign archive, coordinating a foreign tax adviser).

HMRC typically grants the extension where the request is reasoned and shows active progress. A bare request for "more time" with no substance behind it is unlikely to succeed.

Step 3: Pay on disclosure

Once you submit the disclosure pack, you pay the proposed aggregate tax plus interest plus penalty figure to HMRC. Payment options:

• BACS / Faster Payments to the HMRC Worldwide Disclosure account (the account details are issued with the DRN).
• CHAPS for larger sums where same-day clearance is required.
• Cheque sent to the HMRC WDF processing address.

Where the total exceeds what you can pay at once, you request a time-to-pay arrangement as part of the disclosure submission. HMRC's published time-to-pay framework looks at:

• Your income and assets.
• The likelihood of payment if the arrangement is agreed.
• Whether the schedule you propose is reasonable.

Typical arrangements run 12 to 24 months for ordinary cases and up to 60 months for larger cases. Interest accrues on the outstanding balance at HMRC's published rate. The arrangement does not displace the disclosure or alter the penalty position; it spreads the payment.

The HMRC post-disclosure review stage

After you have filed the disclosure pack and the settlement payment, HMRC reviews the disclosure. Typical timeline: three to twelve months depending on case complexity. The review covers:

• Whether the years in scope cover the full discovery window applicable to the behaviour categorisation.
• Whether the year-by-year figures reconcile to the supporting evidence.
• Whether the behaviour categorisation is supportable on the facts.
• Whether the territory categorisation is correctly applied.
• Whether the disclosure-quality discount claimed is supported by the timing, completeness and cooperation of the disclosure.
• Whether the FA 2017 Schedule 18 FtC overlay or the FA 2015 Schedule 21 asset-move uplift should apply on the facts.

HMRC may issue questions, request further evidence, or propose adjustments. Where your disclosure pack is robust and the evidence is primary-source, the review typically completes with limited back-and-forth. Where the disclosure is patchy, it can drag out across multiple rounds of evidence requests.

The review closes in one of three ways:

1. Settlement letter: HMRC accepts the disclosure as filed (or as adjusted by agreement) and closes the matter. You receive a formal letter confirming closure and the terms.
2. Negotiated adjustment: you and HMRC agree adjustments to the figures, the penalty band, or the years in scope; you pay the additional amount, or HMRC refunds an overpayment; the settlement letter follows.
3. Formal assessment: if the negotiation does not resolve, HMRC issues formal assessments under TMA 1970 s.36A, s.36 or s.29 as appropriate. You can then appeal to the First-tier Tribunal under TMA 1970 s.31.

The formal-assessment route is rare in practice where you came forward yourself, the disclosure pack is robust and you engage cooperatively. It is more common where the disclosure is partial, the behaviour is contested, or you stop cooperating during the review.

The criminal-prosecution decision point

The WDF does not provide criminal-prosecution immunity. HMRC retains its full prosecution discretion throughout. In practice, prosecution following a voluntary WDF disclosure is rare; HMRC's published policy is to deal with voluntary disclosures civilly where the underlying behaviour is not at the deliberate-fraud-with-active-concealment end of the spectrum.

Where the matter involves:

• Deliberate and concealed conduct with active false-documentation use.
• Substantial sums of tax loss with evidence of concealment intent.
• Multiple connected taxpayers or facilitators.
• Asset movements specifically intended to defeat HMRC discovery.

The right route is the CoP9 Contractual Disclosure Facility (CDF), which provides immunity from criminal prosecution for matters disclosed under that procedure. The decision is fact-specific and typically requires specialist tax-disputes advice before commencement of either route. Once the WDF process is in motion, the criminal-prosecution risk has not been foreclosed.

Worked example: offshore rental, 6 years undeclared, Cat 1 careless

Mr Patel owns a Spanish villa, let consistently since 2018-19, with annual net rental of roughly 12,000 pounds sterling-equivalent. He never made a UK Self Assessment declaration, though he paid Spanish tax each year (which is eligible for foreign tax credit). His accountant spotted the position in early 2026 during unrelated planning work.

The disclosure pack components:

• Behaviour: careless (genuine misunderstanding of UK reporting obligation on Spanish rental; Spain is a Category 1 territory with full information exchange).
• Years in scope: 2018-19 to 2023-24 (six years under the careless s.36 window).
• Total tax: 6 years multiplied by 12,000 pounds at 40 per cent equals 28,800 pounds gross; foreign tax credit reduces net UK tax to approximately 18,000 pounds.
• Interest: approximately 4,200 pounds across the six-year span at the official rate.
• Penalty band: careless Category 1, prompted disclosure with full cooperation; Schedule 24 paragraph 4 range 15 per cent to 30 per cent; proposal 22 per cent equals 3,960 pounds.
• Total settlement: approximately 26,160 pounds.

Disclosure pack submitted within 90 days of HMRC's acknowledgment, payment made on submission. HMRC review takes six months and accepts the disclosure as filed.

Worked example: pre-2018 offshore, Failure-to-Correct floor applies

Mr Singh held a Hong Kong investment portfolio generating undeclared UK-taxable income from 2012-13 to 2017-18, and the position came to light in 2026.

• Behaviour: careless to deliberate not concealed (depending on the year; Mr Singh had treated the income as outside UK reporting on a misunderstood "non-UK source" basis).
• Years in scope: 2012-13 to 2017-18 (six years pre-FtC deadline).
• FA 2017 Schedule 18 overlay: all years pre-30-September-2018, so FtC applies.
• Total tax: approximately 24,000 pounds across the six years.
• Interest: approximately 8,400 pounds (longer period plus higher recent-year rates).
• Penalty: FtC base 200 per cent reducible to 100 per cent on unprompted full disclosure equals 24,000 pounds.
• Total settlement: approximately 56,400 pounds.

The pre-2018 FtC overlay materially increases the cost of disclosure compared with post-2018 matters. That is exactly why coming forward early, before HMRC opens an enquiry, still saves you real money even where FtC applies: an HMRC-initiated enquiry on the same facts would push the band to the higher end and cut the credit you get for the quality of your disclosure.

How WDF interacts with foreign-jurisdiction tax

Where the offshore matter involves a foreign jurisdiction that taxes the same income or gain (most common case: foreign rental income taxed in the foreign jurisdiction under the foreign rental-tax regime), the UK disclosure operates within the relevant double-taxation agreement.

Most UK DTAs use the credit method: foreign tax paid is credited against UK tax due on the same income or gain, capped at the UK tax. The disclosure must include the foreign-jurisdiction tax filings and payment records as evidence to support the credit. Without that evidence, HMRC may refuse the credit and assess the UK tax in full.

Where you have not yet notified the foreign jurisdiction either (offshore non-compliance in both places), you may need a parallel foreign-jurisdiction disclosure. The UK WDF does not foreclose the foreign-jurisdiction obligation. Coordinating the timing of the UK and foreign disclosures is a strategic question that usually needs cross-border tax-adviser input.

Which disclosure route is yours?

The WDF is one of four HMRC voluntary-disclosure routes:

• Let Property Campaign: UK residential rental. See our LPC page.
• Worldwide Disclosure Facility: offshore income, gains, assets. For the regime behind the procedure on this page, see the WDF and FtC page.
• Digital Disclosure Service: UK non-rental matters not within LPC.
• CoP9 / Contractual Disclosure Facility: deliberate fraud with criminal-immunity protection. See our CoP9 page.

Which route you pick is the single most important decision here, and everything above assumes you have settled on WDF. If you are still weighing it (UK-only vs offshore; cooperative civil vs criminal-immunity-protected), sort that first. For the penalty mechanics that sit behind all four routes, see the Schedule 24 penalty framework page.

The practical sequence for an adviser-led disclosure

For an adviser preparing a WDF disclosure for a client, the working sequence is:

1. Initial scoping call: identify the matter, the years in scope, the behaviour categorisation, and the route choice (WDF vs CoP9). Specialist tax-disputes input where the criminal-prosecution dimension is live.
2. Record-retrieval phase: foreign bank statements, foreign property documents, foreign tax records. This phase is typically the longest part of the work, particularly for older years and for less-cooperative foreign banks.
3. Computational phase: year-by-year tax, interest and penalty computation in HMRC format. Foreign-tax-credit positions verified.
4. Narrative phase: behaviour categorisation written up with reasoning; penalty-band proposal drafted.
5. Notify submission to HMRC via the gov.uk WDF service.
6. Disclosure pack submission within 90 days of HMRC acknowledgment (or 180 with extension).
7. Settlement payment.
8. HMRC review stage with adviser-handled correspondence.
9. Settlement letter received; matter closed.

The total elapsed time from initial scoping to settlement letter is typically nine to eighteen months for a moderate-complexity case, longer for multi-jurisdictional positions or trust structures.

If you have an offshore matter to disclose, are weighing the route choice, or want adviser-led handling of a WDF case, the form at the foot of the page is the way to a structured first-pass assessment. Property Tax Partners works across the WDF, LPC, CoP9 and the underlying penalty framework together, which is what counts when the route choice or the penalty positioning is contested.