WDF Tax Disclosures – statistics updated
WDF Tax Disclosures – Statistics Updated
Last year in June and September, Amit Puri (our Managing Partner) provided updates to the article he first wrote in June 2020 for the Institute of Certified Practising Accountants (ICPA) bi-monthly magazine.
In that article and subsequent updates, Amit examined HMRC’s Worldwide Disclosure Facility (‘WDF’) and reviewed the tax disclosure statistics.
Amit has once again followed up with HMRC’s Information Office to obtain the very latest figures, for the 2022/23 year.
Worldwide Disclosure Facility Background:
As previously covered, the Common Reporting Standard (‘CRS’) was created to provide a global framework to underpin all newer international financial accounts information exchange agreements. It enables well over 100 jurisdictions to share rich banking data with one another annually and automatically, without the need to make case specific requests.
While most agree this helps enhance HMRC’s ability to detect offshore tax non-compliance and thus potential failures by UK individuals, many wonder whether this was just another sledgehammer approach by HMRC to crack a smaller nut of a tax risk.
WDF Tax Disclosures Statistics Figures
| Year | Number of WDF ‘notifications of intent’ to disclose | Number of WDF ‘disclosures received’ |
| 2016 | 211 | 88 |
| 2017 | 4,368 | 2,833 |
| 2018 | 15,244 | 8,334 |
| 2019 | 4,468 | 8,255 |
| 2020* | 1,459* | 1,108* |
| 2021 | – | 4,650 |
| 2022 | – | 7,834 |
| 2023 | – | 4,627
|
| Total | c. 37,729+ |
*2020 values were up to 13/05/2020
What do these figures tell us? A huge 41% decrease in the number of WDF tax disclosures submitted in 2022/23… Perhaps the low hanging fruit for HMRC has disappeared?
| Year | Tax | Interest | Penalties | WDF Total |
| 2016
|
£995,598 | £142,590 | £106,642 | £1,244,831 |
| 2017
|
£25,469,102 | £4,510,624 | £3,238,601 | £33,218,328 |
| 2018
|
£81,267,286 | £9,885,174 | £9,279,856 | £100,432,317 |
| 2019
|
£129,578,030 | £20,569,685 | £20,774,308 | £170,922,024 |
| 2020* | £8,655,598 | £965,446 | £3,380,107 | £13,001,152 |
| 2021
|
£48,995,945 | £4,380,074 | £16,327,984 | £69,704,003 |
| 2022 | £57,167,247 | £5,419,231 | £16,590,789 | £79,177,267 |
| 2023 | £60,003,665 | £4,073,036 | £9,840,354 | £73,917,055 |
| Total
|
£471,912,974+ |
*2020 values were up to 13/05/2020
WDF Statistics Analysis:
In the year 2022-23 the number of WDF disclosures submitted to HMRC had reduced significantly, by 41%, whereas they had increased significantly in the previous year. They decreased by 3,207, whereas the 21/22 figure had increased by 3,184! So there doesn’t appear to be anything meaningful to be drawn out from this.
The total taxes collected are higher but taken with the lower number of disclosures, it appears the average value of each disclosure is higher at £15,975, having increased a fair bit from the £10,107 average in 2021-22.
While the total penalties charged has reduced, by £6.75 million, 41%, which is in-line with the 41% reduction in the number of disclosures submitted… So there doesn’t seem to be a trend change here. Any material change in the penalties being charged, could perhaps have represented a softening by HMRC, or perhaps fewer cases involving the punitive FTC (Failure to Correct) penalties of 100-200%.
From our own experience, taxpayers are still seeking specialist, independent advice from us following receipt of HMRC ‘nudge letters’ informing recipients that they had offshore banking data to hand. We have seen very few wholly voluntary disclosers come forward though, which remains the trend. This is unfortunate, because a prompted FTC penalty starts at 150%, whereas a voluntary/un-promoted one starts at 100%
The take home message remains that, all those who wait for HMRC to contact them lose the ability to make wholly voluntary disclosures, therefore they’re unable to secure the minimum FTC penalties (100%). Instead they attracted 150% minimum penalties!
Do readers agree that the number of disclosures made look disproportionately low?
Sitting back and viewing this, it would appear the same issues remain. The number of WDF tax disclosures being made are still miniscule when compared to the considerably larger number of non-UK accounts notified to HMRC by other jurisdictions.
If we take as an example the 2018 and 2019 figures, we can see that a total of 16,589 disclosures were submitted to HMRC over those two years. If we then compare this against the number of non-UK financial accounts reported to HMRC in say 2017 or 2018 we know these were circa 3 and 4 million, which exponentially eclipsed the number of disclosures made, even if assuming all of them were prompted by HMRC letters.
In May 2022, HMRC reportedly confirmed that in 2019 it believed UK residents had some £850 billion in financial accounts overseas!
HMRC’s clear lack of ambition and action is apparent. This is despite them being armed with so much offshore banking data. Perhaps they did reach bursting point!
We still strongly believe the number of disclosures made under the WDF is heavily and directly influenced by the number of written prompts (aka ‘nudge letters’) sent by HMRC. Such letters confirm that HMRC have banking information from other countries, about the UK recipients’ non-UK financial accounts, and recommend that disclosures be made if appropriate.
How we can help?
We believe it’s in a client’s best interests to discuss these types of matters with an ‘independent specialist’ even if there are no discrepancies to disclose. The right help at the right time ensures that HMRC are effectively managed and enquiries / disclosures are concluded expeditiously.
Our team are experts at resolving contentious tax issues accurately and efficiently, and we are highly adept at managing our clients’ interactions with HMRC to ensure processes run smoothly and that our clients’ interests are best protected at all times.
Importantly, we deliver that all-important trusted ‘buffer’ between our clients and HMRC during disclosures, and in-depth and intrusive investigations.
Get in touch to learn more about how Amit and the Tax Investigations and Disputes team have successfully guided clients through the COP9 or COP8 investigation processes.
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