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

This page is the operational walkthrough for making a Worldwide Disclosure Facility submission to HMRC. For the regime overview, the FA 2017 Schedule 18 Failure-to-Correct overlay, the territory-category penalty framework, and worked penalty examples, see our companion Worldwide Disclosure Facility and Failure-to-Correct page. Here we cover what you actually do once you have decided to disclose: the three-step process (Notify, Disclose, Pay), the disclosure-pack contents, the year-by-year computation format, the interest and penalty mechanics, and the HMRC post-disclosure review stage that runs from settlement payment to final closure letter.

The audience for this page is the taxpayer or adviser sitting at the moment of "I have an offshore matter to disclose; what is the process?" The framework assumes the route choice has been made (WDF, not CoP9, not Let Property Campaign), and walks through the operational mechanics of the chosen route.

The three-step architecture

The WDF process is structured around 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 has its own discipline and its own documentation. The most common practical mistake is to compress the three steps into one or to misunderstand when each clock starts running. The 90-day disclosure clock starts from HMRC's acknowledgment of the Notify, not from the day the taxpayer first realised they had a matter.

Step 1: Notify HMRC

The Notify is submitted via the gov.uk WDF service. It is a short form that identifies:

• The taxpayer (name, address, UTR or tax-reference number).
• An 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 (the taxpayer has identified the matter and is volunteering it) or prompted (HMRC has issued a nudge letter or otherwise approached the taxpayer).

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

Step 2: Disclose within 90 days

The disclosure pack must be submitted to HMRC within 90 calendar days of HMRC's acknowledgment of the 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 it was acquired, how it was used.
• The source documents that have been 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).
• The taxpayer's behaviour categorisation: innocent error, careless, deliberate not concealed, or deliberate and concealed. This is the foundation for the penalty-band positioning.

(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 (taxpayer reconstruction from memory plus indirect sources such as agent statements or letting platform records) is acceptable where primary sources cannot be obtained. The disclosure pack should explain the gaps and the steps taken to fill them. Acceptance of secondary evidence by HMRC 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.

The 90-to-180-day extension

Where the 90-day window is insufficient, the extension to 180 days is requested in writing. The extension request should set out:

• The complexity of the matter: multi-jurisdictional positions, 12-year computations, trust structures, multiple sources.
• The steps being taken to source records, with dates and milestones.
• The reason particular records are not yet to hand (foreign bank closure, document retrieval from foreign archive, foreign-tax-advisor coordination).

HMRC typically grants the extension where the request is reasoned and demonstrates active progress. A bare request for "more time" without substantive reasoning is unlikely to succeed.

Step 3: Pay on disclosure

Once the disclosure pack is submitted, the proposed aggregate tax plus interest plus penalty figure is paid 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 aggregate exceeds the taxpayer's liquidity, a time-to-pay arrangement is requested as part of the disclosure submission. HMRC's published time-to-pay framework looks at:

• The taxpayer's income and assets.
• The likelihood of payment if the arrangement is agreed.
• The reasonableness of the proposed schedule.

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 the disclosure pack and settlement payment are filed, 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 the taxpayer's disclosure pack is robust and the evidence is primary-source, the review typically completes with limited iteration. Where the disclosure is patchy, the review can extend with 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. The taxpayer receives a formal letter confirming closure and the terms.
2. Negotiated adjustment: HMRC and the taxpayer agree adjustments to the figures, the penalty band, or the years in scope; the taxpayer pays 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. The taxpayer can appeal to the First-tier Tribunal under TMA 1970 s.31.

The formal-assessment route is rare in practice for taxpayer-initiated WDF disclosures where the disclosure pack is robust and the engagement is cooperative. It is more common where the disclosure is partial, the behaviour is contested, or the taxpayer becomes uncooperative 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

Patel-offshore-landlord owns a Spanish villa let consistently since 2018-19. Annual net rental approximately 12,000 pounds sterling-equivalent. No UK self-assessment declaration ever made; Spanish tax has been paid each year (eligible for foreign tax credit). The position was identified by Patel's accountant 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

Singh-offshore-investor held a Hong Kong investment portfolio generating undeclared UK-taxable income from 2012-13 to 2017-18. Position identified in 2026.

• Behaviour: careless to deliberate not concealed (depending on the year; Singh 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 relative to post-2018 matters. This is the structural reason early voluntary disclosure (before HMRC opens enquiry) still delivers a meaningful saving even where FtC applies: HMRC-initiated enquiry on the same facts would push the band to the higher end with reduced disclosure-quality credit.

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 the foreign jurisdiction has not yet been notified by the taxpayer (offshore non-compliance in both jurisdictions), a parallel foreign-jurisdiction disclosure may be required. The UK WDF does not foreclose the foreign-jurisdiction obligation. Coordinating the timing of the UK and foreign disclosures is a strategic question that typically needs cross-border tax-advisor input.

How WDF sits alongside the wider disclosure architecture

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. This page is the operational walkthrough; the companion WDF and FtC page is the regime overview.
• Digital Disclosure Service: UK non-rental matters not within LPC.
• CoP9 / Contractual Disclosure Facility: deliberate fraud with criminal-immunity protection. See our CoP9 page.

The route choice is the single most important strategic question. The WDF process described on this page assumes the route choice has been made in favour of WDF. If you are still weighing the route, the route-choice analysis (UK-only vs offshore; cooperative civil vs criminal-immunity-protected) should come first. The Schedule 24 penalty framework page covers the underlying penalty architecture that sits behind all four routes.

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 need adviser-led handling of a WDF case, the form at the foot of the page is the route to a structured first-pass assessment. Property Tax Partners works across the WDF, LPC, CoP9, and underlying penalty-framework content together, which matters where the route choice or the penalty positioning is contested.