The ability of HMRC to access the third party information in the jurisdictions has increased considerably with the introduction of the Common Reporting Standard (CRS). It enables the HMRC to easily identify the individual who has not complied with their up-to-date tax affairs.
Hence, making a voluntary disclosure to the HMRC of the unpaid tax liability is a cost-effective way to resolve any historic tax issues.  In case of serious tax evasion, it is recommended to register under the Contractual Disclosure Facility. Effective 1st October 2018, the failure to correct provision has ensured that the tax affairs to be in order. Failure to the correction will result in serious penalties of –

• 300% of the potential lost revenue

• New 10% asset-based penaltynew 10% asset-based penalty

• Naming and shaming (as the name, address, and details of tax underpaid would be published by HMRC)

This would result in reputational damage which can be avoided. The individual who does not meet the tax payment, may even be prosecuted by HMRC.
The offshore disclosure opportunities are the HMRC campaign that aims at the specific group of taxpayers, where an unpaid tax liability arises from the let property, which are the second income or credit card sales.

Why disclose your tax voluntarily?

The individuals are more susceptible to the investigation by HMRC as connect software allows the collection and analysis of abundant data. There is an increased chance of discovery of tax fraud and tax avoidance that is undertaken. In some instances, even when the taxpayers have sought to be compliant with the reported obligation by HMRC, the review of the matter could reveal the errors as unintentionally made by them. In such cases, HMRC recommends prompt and complete disclosure.
Despite the voluntary nature of making a tax disclosure, it is also vital to remember that any potentially controversial interaction with HMRC would be taken seriously. Failure to provide complete disclosure of all relevant liabilities may have significant implications.
Additionally, HMRC has the right to refuse entry into the formal tax disclosure process and even open a compliance check or in even more serious cases, start a fraud investigation.