It is likely that the more complex tax investigations will result in a Disclosure Report being commissioned by the taxpayer.
What should a Disclosure Report contain?
A Disclosure Report could provide sufficient narrative to identify what the issue is, how it arose and which tax periods are affected. It may be that some information or documentation is no longer available. The Disclosure Report should make it clear when an estimate has been used and how that estimate has been computed.
It may be that no single conclusion can be reached on a particular irregularity. In which case it should be made clear that the matter is still subject to further negotiation with HMRC following the submission of the Disclosure Report.
It may also be advisable to consider taxpayer behaviour. In addition, it may include any mitigating factors in terms of determining the level of penalties that may be imposed.
It is also a question of style. Some Disclosure Reports identify individual amounts that are taxable or the amounts of tax due for each tax period.
How long does it take to write a Disclosure Report?
It is more likely that the timetable is driven by how long HMRC are prepared to wait. Actually writing the Disclosure Report may take longer. This is because more time is spent finding and collating all the relevant facts to be included in the Disclosure Report.
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