Case Study: Saved the client £1.5m+ in penalties
At ADL Tax, we understand the anxiety and stress that tax disputes can cause. Our mission is to help our clients resolve these issues with expertise and care, providing them with the best possible outcomes. Here’s a real-life example of how we successfully navigated a complex tax dispute on behalf of a client, Mr. S, who faced significant challenges, and saved him over £1.5m in penalties.
The Challenge: Undeclared Offshore Income
Mr. S had accumulated over £5 million in offshore income that had not been declared to HMRC over the years.
This substantial amount and the circumstances surrounding the non-declaration called for a meticulous and strategic approach. Our goal was to protect our client while ensuring compliance with HMRC regulations.
The Solution: Voluntary Disclosure via COP9/CDF
Given the gravity of the situation, we decided that the most appropriate course of action was to utilise the voluntary Code of Practice 9 (COP9) and the Contractual Disclosure Facility (CDF). This route would allow Mr. S to make a full disclosure while potentially mitigating penalties.
Registration and Agreement: We successfully registered Mr. S under COP9 and CDF, and then agreed with HMRC to produce a detailed disclosure report.
In-Depth Exploration: We delved deeply into Mr. S’s circumstances, uncovering evidence of significant health and personal difficulties during the period when a correction under the Requirement to Correct (RTC) provisions would have been necessary (prior to and since 30 September 2018).
Detailed Disclosure Report: We meticulously prepared a comprehensive disclosure report, outlining Mr. S’s situation and the reasons for the non-declaration.
The Outcome: A Favourable Resolution
Within 30 days of submitting the report, HMRC accepted our disclosure. Instead of facing the harsh Failure to Correct (FTC) penalty, which ranges from a minimum of 100% up to 200%, Mr. S was only subjected to a “normal” inaccuracy penalty, saving him over £1.5m in additional liabilities.
The Impact: Financial Security Preserved
The difference between the FTC penalty and the normal penalty was life-changing for Mr. S. If he had been required to pay the FTC penalty, he would have been financially devastated, likely needing to sell his home and business to settle with HMRC. Our intervention and successful navigation of the disclosure process protected Mr. S from this outcome, preserving his financial stability and future.
Take Action Today
If you need to make a voluntary disclosure, don’t delay. Contact ADL Tax today for expert support and guidance. Our team is ready to assist you in regularising your tax affairs and minimising potential penalties.
Book a free initial consultation with us today and take the first step towards resolving your tax issues.
