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Resolving Offshore Tax Dispute for UK Resident - a Case Study

Resolving Offshore Tax Dispute for UK Resident – a Case Study

Client Background

Our client sought our help when he received correspondence from his offshore bank. He was a UK resident working overseas during the week and needed support resolving a potential offshore tax dispute. The bank informed him about their obligation to share his account details with HMRC under the Common Reporting Standard. The client realised that he had not disclosed the offshore account to HMRC. The threat of potential investigations for tax fraud concerned him.

The issue for the client

The primary issue was the urgent need to disclose the offshore account to HMRC. This was needed before the bank shared information that could trigger a tax fraud investigation. This would amount to a criminal offence. Over the years, the client had accumulated over £700k in contracting income in the offshore account. In the initial year, he didn’t declare any of this income to HMRC. From the second year onward, only half of the income was transferred to a UK bank, with disclosure made only for that part.

Resolution approach

To address the issue, we took decisive action on behalf of our client by applying to HMRC for the Contractual Disclosure Facility. This facility allows individuals to disclose extra tax liabilities on a civil basis voluntarily. It mitigates the risk of criminal proceedings.

The outcome of the process

We embarked on a thorough analysis of the client’s situation. We strategically approached the disclosure process. Despite the seriousness of failing to disclose income in the first year, we successfully argued that there were valid reasons for the client’s behaviour. In the initial year, the taxpayer was in a new country. Third parties such as agency representatives and the offshore bank guided them, and he followed their advice.

We were able to prove a case of carelessness rather than intentional tax evasion. We did this by distinguishing the taxpayer’s behaviour in the first year from later years. This argument proved pivotal in saving the client a total of £170k in tax, interest, and penalties. HMRC was deemed out of time to assess. This further safeguarded the client from potential financial ramifications.


This case exemplifies the importance of proactive tax planning and voluntary disclosure in navigating a complex offshore tax dispute and financial situations. Our team leveraged the Contractual Disclosure Facility and presented a compelling case for carelessness. We helped our client avoid criminal charges. We also significantly reduced the financial burden associated with backdated tax liabilities. This outcome underscores the value of strategic and informed decision-making when dealing with international tax matters. Get in touch to find out more about our services.

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