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HMRC internal manual

Compliance Operational Guidance

From
HM Revenue & Customs
Updated
, see all updates

Supporting Guidance: employer compliance: guidance by subject: compliance revenue recording: voluntary disclosure

Voluntary disclosures are classed as either ‘prompted’ or ‘unprompted’.

If a disclosure is made as a result of a publicity campaign or other HMRC activity outside of an ongoing compliance intervention the disclosure is classified as ‘unprompted’.

Where an employer makes a disclosure you should

  • write or telephone the employer acknowledging the disclosure and, where it is not apparent what has prompted the disclosure seek a full explanation as to the reason the disclosure has been made
  • without prejudice accept any payment on account made and ask the SAFE nominee to produce a SAFE payslip (PS2) showing the taxpayer’s SAFE Customer Reference. If a Customer Account reference number is not held the designated SAFE nominee should be approached to set one up. Send the cheque and payslip f(This content has been withheld because of exemptions in the Freedom of Information Act 2000)
  • advise the employer that someone will contact them in the next 15 working days to inform them how we intend to proceed
  • send the disclosure and any accompanying documents including details of Payments on account received either
    • electronically to the (This content has been withheld because of exemptions in the Freedom of Information Act 2000) mailbox. Guidance to the mailbox process can be found here, or
    • by post (following data security guidelines) to RIS Operations Production North, EC Referrals Team, Portcullis House, 21 India St, Glasgow, G2 4PZ.

The referral should be prominently noted in the reason for referral as ‘Voluntary Disclosure’ and should provide information as to whether the Voluntary Disclosure is prompted or unprompted.

Disclosures made direct to CRM, CC and TSs in respect of Large Employers will continue to be dealt with within the appropriate Customer groups. However where disclosures are made to the wider HMRC and the employer falls outside the SME population RIS Ops will forward all correspondence and documents to the relevant Customer groups/directorates contacts for distribution to the relevant Business Unit/caseworker.

The referral contact points are:

  • L&C Risk Flow Team, Medvale House, Mote Rd, Maidstone, Kent, ME15 6AF
  • PBG (Large Employers) PBG workflow Manager
  • LB Customer Relationship Manager for business
  • Charities, Savings & International, CS&I EC Disclosure Team, 3rd Floor Trinity Bridge House, Salford, M3 5BW - (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
  • for cases where there is no PAYE scheme RIS Ops will arrange for the case to be sent to the Hidden Economy Risk Team, Saxon House, 1 Causeway Lane, Leicester, LE1 4AA
  • where there is an existing case working, the disclosure will be classed as ‘prompted’ and will be passed to the relevant caseworker. Where the working case relates to a different head of duty the caseworker will be responsible for bringing in an Employer Compliance colleague as necessary.

For all SME population (excluding expatriate customers in line with the expat protocol which should be referred to (This content has been withheld because of exemptions in the Freedom of Information Act 2000)  and Hidden Economy un-prompted cases RIS Ops will, complete a risk assessment of the case and where

  • other risks are identified prepare a Standard Information Package and

    • set up the risk arising from the unprompted disclosure as an Employer Amendment Compliance check using the inaccuracy category relating to the disclosure
    • set up the other risks identified as a ‘full’ compliance check and
    • send the case to the appropriate LC Workflow Manager.
  • no other risk is identified set the case up as an employer amendment and forward to LC so that further contact can be made with the business.

All cases will be set up under the Employer Voluntary Disclosure project.

The relevant LC contacts are

  • for PBG businesses the PBG workflow manager
  • for SME businesses the Employment Status & Intermediaries (ES&I) workflow manager
  • for cases where there is no PAYE scheme the nominated workflow contact.

These contacts will ensure that cases are delivered to caseworkers to ensure that the employer receives a response within the 15 day period.

Any disclosures in respect of Shares and Securities should follow existing protocols, see COG904580.

Action by Compliance Caseworker

Where you receive a SIP or notification relating to a voluntary disclosure it is important that you make contact with the employer within the 15 day period in respect of the amount disclosed.

  • for an unprompted disclosure with other risks

    • calculate and pursue interest
    • consider penalties
    • recover all amounts due by contract settlement
    • record the full amount recovered as class 6 settlement.

Note: It is necessary to create separate entries in respect of the unprompted disclosure and other risks because of compliance revenue reporting requirements (COG915560)

* record the underpayment, interest and penalty in respect of the unprompted disclosure against the relevant risk on the Employer amendment Compliance check
* record the underpayment, interest and penalty arising from risks not included in the original disclosure against the appropriate risks on the Full Compliance check
* raise the charge in SAFE ensuring all Payments on account are allocated to the charge and where excess payments on account are held arrange for these to be repaid or reallocated
* for large employers the L&C Caseflow protocol should be followed.

See example in Appendix 1 (Word 27KB)

  • for an unprompted disclosure with no other risks

    • calculate and pursue the amount arising from the unprompted disclosure
    • calculate and pursue interest
    • consider penalties
    • recover all amounts due by contract settlement
    • record the full amount recovered as class 6 settlement
    • record the amount in respect of the disclosure, interest and penalty on the employer amendment compliance check
    • raise the charge in SAFE ensuring all Payments on account are allocated to the charge and where excess payments on account are held arrange for these to be repaid or reallocated.