What Is the Worldwide Disclosure Facility?
The Worldwide Disclosure Facility (WDF) is HMRC's dedicated online service for taxpayers who need to disclose UK tax liabilities relating to offshore income, assets, or activities. It replaced the earlier Liechtenstein Disclosure Facility and provides a structured route for voluntary disclosure.
The WDF is available to anyone who has unpaid UK tax connected to an offshore issue — this includes income from overseas property, foreign investments, offshore bank accounts, or income earned while working abroad.
Why Should You Use the WDF?
HMRC's ability to detect offshore non-compliance has increased dramatically. Through the Common Reporting Standard (CRS) and bilateral information exchange agreements, HMRC now automatically receives financial data from over 100 jurisdictions worldwide.
Making a voluntary disclosure through the WDF before HMRC contacts you offers several advantages:
- Lower penalties: Voluntary disclosure typically attracts lower penalties than prompted disclosures
- Reduced risk of criminal investigation: Proactive disclosure demonstrates good faith
- Control over the process: You set the pace of the disclosure rather than responding to HMRC demands
- Certainty: Once the disclosure is agreed, the matter is settled
How the WDF Process Works
- Step 1 — Notification: You notify HMRC of your intention to make a disclosure via the online WDF portal
- Step 2 — Receive Reference Number: HMRC issues a unique Disclosure Reference Number (DRN)
- Step 3 — Prepare Disclosure: You have 90 days from notification to submit your full disclosure, including calculations of tax, interest, and penalties
- Step 4 — Submit & Pay: Submit the disclosure with payment of the amount due
Penalties Under the WDF
Penalties for offshore non-compliance can be significant — in some cases reaching up to 200% of the tax due, particularly where the offshore jurisdiction is classified as a Category 3 territory.
However, by making a voluntary, unprompted disclosure, penalties can often be negotiated down considerably. The quality and completeness of your disclosure are key factors HMRC considers when determining the penalty rate.
Expert Help from GSC Consultancy Tax
Navigating the WDF requires careful preparation and accurate calculation of tax liabilities, interest, and penalties. Our team provides end-to-end support, from initial assessment through to HMRC acceptance of your disclosure.
Contact GSC Consultancy Tax for a confidential discussion about your offshore tax position.