# HMRC enquiries and cleanup > Legal guide to HMRC offshore enquiries, CRS data, Worldwide Disclosure Facility, penalties, amended returns and evidence repair. Author: Олег Рябцев — партнёр, Family Office (https://wiki.private.law/authors/ryabtsev) Last modified: 2026-06-04T06:16:00.000Z Canonical: https://wiki.private.law/en/uk-hmrc-enquiries-cleanup Topics: investments Jurisdictions: uk Product tags: audit, tax-regime, wealth-planning Semantic tags: audit, tax-regime, wealth-planning --- --- ## Concept Cleanup is a legal reconstruction of past tax years, not a cosmetic amendment to match a bank balance. It identifies the correct residence, income, gains, trust, company and disclosure positions for each year before anything is said to HMRC. The order matters: facts first, quantification second, disclosure route third. HMRC receives offshore information through the Common Reporting Standard and related exchange systems described in [IEIM400080](https://www.gov.uk/hmrc-internal-manuals/international-exchange-of-information/ieim400080). From 1 January 2026 the [Cryptoasset Reporting Framework](https://www.gov.uk/government/publications/cryptoasset-reporting-framework-reporting-of-uk-resident-cryptoasset-users/domestic-reporting-of-uk-resident-cryptoasset-users-under-the-cryptoasset-reporting-framework) extends the same reporting logic to crypto, with the first international exchanges due in 2027. Where offshore income or gains were not reported correctly, HMRC's [Worldwide Disclosure Facility](https://www.gov.uk/guidance/worldwide-disclosure-facility-make-a-disclosure) is one official route, run through the Digital Disclosure Service with a 90-day window to complete a notified disclosure. The general route for other liabilities is HMRC's [voluntary disclosure guidance](https://www.gov.uk/government/publications/hmrc-your-guide-to-making-a-disclosure/your-guide-to-making-a-disclosure). > 🍓 HMRC can open enquiries and raise discovery assessments, and the data usually arrives before the file is rebuilt. The losing move is a partial disclosure made before the full fact pattern is known. Establish residence, income, gains, trusts, companies and conduct across every open year first — then choose the disclosure route and quantify tax, interest and penalties. ## Scope Cleanup reaches omitted foreign income, unreported gains, offshore accounts, non-reporting funds, trust benefits, company distributions, CRS mismatches, late residence corrections and prior remittance-basis problems. It does not handle criminal defence in detail, but conduct and intent must be assessed early because they drive the route and the penalty exposure. ## The chronological test The analysis is year by year. For each open year: determine residence; identify foreign income and gains; test reliefs and treaties; identify trust or company attribution; compare with the return filed; quantify tax, interest and penalties; decide the disclosure route; and preserve privilege where appropriate. | **Step** | **Question for each year** | | --- | --- | | Residence | UK resident, non-resident or split-year under the Statutory Residence Test | | Income and gains | which foreign income and gains arose, and whether they were taxable in the UK | | Attribution | trust or company income and gains attributed to the settlor or beneficiary | | Comparison | what the return filed actually reported against the reconstructed position | | Quantum | tax, interest and penalty exposure, including offshore penalty categories | | Route and conduct | amended return, WDF or other route, assessed against carelessness or deliberate behaviour | ## Outcomes and risk The outcome may be an amended return, a WDF disclosure, a negotiated penalty position, an enquiry response, or a decision that a more formal route is required. The posture turns on carelessness, reasonable excuse, deliberate conduct, the offshore category and the quality of evidence. **Controlled cleanup** Scope, years, taxes, conduct and route are defined before contact. Current-year compliance is aligned so the repair does not create a fresh contradiction. Bank data, CRS records and trust and company facts are reconciled into one position. **The recurring failures** A partial disclosure before the facts are known; treating bank data as complete while trusts, companies, funds and crypto wallets also exist; and ignoring years that look closed but stay open under offshore time limits or because behaviour was deliberate. ## Examples A client finds CRS reports for Swiss dividends omitted from the foreign income pages. A former remittance-basis user remitted pre-2025 foreign income without treating it as taxable. A trust beneficiary received offshore benefits that were neither matched nor reported. A crypto investor reported exchange cash-outs but not token-to-token disposals, the kind of transaction the Cryptoasset Reporting Framework starts reporting to HMRC from 2026. ## Checklist - Fix the open years before drafting anything, including years held open by offshore time limits. - Reconstruct residence, income, gains, trust and company positions year by year. - Reconcile bank data, CRS records, fund statements and crypto exports into one schedule. - Quantify tax, interest and penalties, and assess the conduct category. - Choose the disclosure route on the facts: amended return, WDF or another official route. - Align current-year compliance so the cleanup does not create new inconsistencies. ## Common mistakes - Making a partial disclosure before the full fact pattern is known. - Treating CRS or bank data as the complete picture. - Assuming a year is closed when offshore time limits or deliberate behaviour keep it open. - Amending figures to match a bank balance without the legal analysis behind them. - Repairing old years while filing a current-year return that contradicts the cleanup. ## Advisor trigger A tax adviser can run a straightforward amended return where the error is small and the conduct is plainly careless. A UK tax lawyer should lead where there is deliberate conduct, potential willfulness, a possible criminal dimension, large or multi-year offshore exposure, trust and company attribution, or any need to preserve legal privilege. ## What HMRC already knows > 🔗 **Related** > [what HMRC receives under CRS and FATCA](https://wiki.private.law/en/uk-crs-fatca-hmrc-data) By the time a file is rebuilt, HMRC usually holds the data already. The Common Reporting Standard feeds it balances, dividends and disposal proceeds from more than a hundred jurisdictions; FATCA covers US-linked accounts; and from 2026 the Cryptoasset Reporting Framework adds exchange and wallet activity. Our note on what HMRC receives under CRS and FATCA sets out that feed. The working assumption is that the counterparty data already exists, so a disclosure should be built to match the record HMRC can see rather than to introduce something it does not. ## Time limits that decide the work How far back the repair reaches is set by statute rather than by how many years of statements survive. The ordinary assessment window is four years. Careless errors extend it to six, and for offshore income, gains and chargeable transfers the Finance Act 2019 took the careless or mistaken limit to twelve years across income tax, capital gains tax and inheritance tax. Deliberate behaviour reaches twenty. Conduct sets both the penalty and the number of years in scope, which is why it is assessed before anything is quantified. > ⚙️ Treat twelve years of offshore exposure as the working span for a careless error, and twenty for deliberate conduct. Reconstruct every year inside that reach before deciding what to disclose. ## Penalties and the disclosure routes Offshore penalties are heavy by design. The Failure to Correct regime, which followed the September 2018 deadline to put historic offshore matters right, runs from 100% to 200% of the tax, loaded by the territory category. A full, accurate and unprompted disclosure earns the largest reduction; that credit narrows once HMRC already holds the data, and a delay of more than three years is normally treated as a significant period that limits relief. The Worldwide Disclosure Facility, made through the Digital Disclosure Service, opens a 90-day window once a disclosure is notified. Where HMRC suspects deliberate fraud it does not offer the Worldwide Disclosure Facility. It issues Code of Practice 9 under the Contractual Disclosure Facility: 60 days to admit deliberate conduct and disclose it in full, in return for immunity from criminal prosecution on the matters disclosed. Picking the wrong route, or making a partial disclosure inside any of them, is what turns a manageable position into a contested one. ## Cleanup after the 2025 reset > 🔗 **Related** > [Foreign Income and Gains regime](https://wiki.private.law/en/uk-fig-regime) · [remittance-basis](https://wiki.private.law/en/uk-remittance-basis-after-2025) · [new rules](https://wiki.private.law/en/uk-non-dom-2025) · [what HMRC receives under CRS and FATCA](https://wiki.private.law/en/uk-crs-fatca-hmrc-data) · [UK tax residence](https://wiki.private.law/en/uk-tax-residence) · [trusts and inheritance tax](https://wiki.private.law/en/trusts-inheritance-tax) The 2025 reform changed what cleanup examines. Domicile was removed as a connecting factor, the remittance basis closed on 6 April 2025, and a residence-based Foreign Income and Gains regime replaced it. Most historic files now hold a mix of old remittance-basis years and the new rules, and the two have to reconcile rather than contradict. The [Temporary Repatriation Facility](https://www.gov.uk/hmrc-internal-manuals/residence-domicile-and-remittance-basis/rdrm71000) runs alongside the repair: former remittance-basis users can designate pre-6 April 2025 foreign income and gains at 12% for 2025/26 or 2026/27 and 15% for 2027/28, paid through self-assessment. A cleanup that ignores the facility can leave tax standing that the same disclosure could have settled at the lower rate. > 🧭 Sequence matters. Settle the residence and conduct analysis first, then decide whether designating pre-2025 income and gains under the repatriation facility belongs in the same disclosure. Related on this wiki: what HMRC receives under CRS and FATCA, UK tax residence, the non-dom abolition, the FIG regime and trusts and inheritance tax. ## Q&A ### Is WDF the only disclosure route No. The Worldwide Disclosure Facility is one official route for offshore income or gains. The correct route depends on the years, the tax type, the conduct, and whether the returns can still be amended. ### Should a client wait for HMRC to ask Not usually, where a known offshore error exists. Delay can worsen the penalty position and damage credibility once HMRC already holds CRS data. But the disclosure should follow the facts, not precede them. ### Can CRS data be wrong Yes. A mismatch can come from classification or reporting error. It still needs an explanation supported by evidence, because HMRC works from the data it received until the record shows otherwise. ### Can a partial disclosure backfire Yes. Disclosing one account or one year before the full pattern is known can create contradictions with later facts, undermine the conduct argument and increase the penalty exposure. --- ## FAQ ### Is WDF the only disclosure route No. The Worldwide Disclosure Facility is one official route for offshore income or gains. The correct route depends on the years, the tax type, the conduct, and whether the returns can still be amended. ### Can CRS data be wrong Yes. A mismatch can come from classification or reporting error. It still needs an explanation supported by evidence, because HMRC works from the data it received until the record shows otherwise. ### Can a partial disclosure backfire Yes. Disclosing one account or one year before the full pattern is known can create contradictions with later facts, undermine the conduct argument and increase the penalty exposure. --- ## Factual claims - HMRC receives offshore information through the Common Reporting Standard and related exchange systems described in IEIM400080. - The 2025 reform changed what cleanup examines.