The UK government’s Worldwide Disclosure Facility (WDF) has been running since September 2016, starting at around the time of the Requirement to Correct (RTC) directive, which ended in 2018. This was the deadline by which HMRC expected everyone who needed to disclose offshore matters to have done so.
The WDF initiative provides individuals who have earned income or achieved gains overseas with a streamlined opportunity to bring their UK tax affairs up to date by making a voluntary disclosure through an HMRC portal. Provided the disclosures made online are full and complete, there is no need to engage further with HMRC.
But, despite a growing number of disclosures, and more ‘nudging’ on the part of HMRC, the trend of total annual tax receipts has been down.
More to be done
HMRC has secured just under £920m from WDF to date, including taxes, statutory late payment interest and penalties.
It is positive to see consistent numbers coming out of a disclosure facility where HMRC’s one-to-many approach has been deployed, which is not as resource intensive as one-to-one enquiries. Over the past two years, HMRC has secured over £100m from each. That said, the total annual taxes have been lower than in 2023 (£103.7m), despite the number of disclosures being received increasing year-on-year.
It is unclear why the total penalties for 2025/26 were so high compared the previous year (more than doubling) despite the total taxes reducing materially.
HMRC could still be doing more. The number of WDF disclosures made annually (see graphic) has remained painfully low compared to the enormous volume of banking data available.
The average tax secured per disclosure figure has not increased over time
As an example, the total number of WDF disclosures received in 2018 and 2019 was 16,589, but the number of offshore accounts reported to HMRC in, say, 2017 or 2018 was around three or four million. The data exponentially eclipsed the number of disclosures made and the number of nudge letters HMRC sent out.
Nudge performance
There is a correlation between the number of one-to-many letters sent out by HMRC and the number of WDF disclosures received (see graphic). However, with fewer than 2,000 informal letters being sent out a month, it is low in comparison to the millions in lines of banking accounts data HMRC receives every year.
The number of WDF disclosures received annually had remained quite flat until 2025/26, but that appears to be changing now. Many fewer informal nudge letters were sent out in the past five years compared with the prior four years; it is unclear why.
Surprisingly, the average tax secured per disclosure figure has not increased over time. This is despite HMRC extending the 12-year tax-assessing rule for offshore matters and offshore transfers. One would expect there to be more tax years included in WDF disclosures.
Annual tax revenues from WDF disclosures have not increased, which seems to correlate with the low numbers of nudge letters sent out. It is unclear whether this is because HMRC is unambitious, incapable of doing more or just drowning under all the banking data.
Those who wait for HMRC to contact them lose the ability to make a wholly voluntary disclosure
Some suggest that HMRC has ramped up the number of regular one-to-one enquiries carried out using the bulk offshore financial accounts data, but this does not appear to be the case. It seems apparent that the number of WDF disclosures being made remains directly influenced by the number of nudge letters sent by HMRC.
Also, HMRC appears to continue to focus on people with much smaller levels of (un-remitted) income overseas and/or those who have not been resident in the UK for long, possibly being the low-hanging fruit. Those people accessed the Remittance Basis automatically (and for free).
Those who wait for HMRC to contact them lose the ability to make a wholly voluntary disclosure and are therefore unable to secure the minimum penalties. It is still a good time to review a client’s overseas activities, accounts, wealth etc, and ensure that UK taxes on investment income and gains are correctly calculated and disclosed.
We should secure the best possible outcome for clients, based on robust knowledge about tax assessment time limits, the various offshore penalty regimes that apply and double-taxation relief quirks.
