The Digital Disclosure Service is HMRC’s online route for individuals and companies to correct undeclared income, gains or underpaid tax before HMRC finds it. You notify HMRC first, then have 90 days from its acknowledgement to submit the disclosure, a formal offer and payment of the tax, interest and a penalty you calculate yourself. Coming forward unprompted gives the lowest available penalty ranges.

What can the Digital Disclosure Service be used for?

HMRC’s guide Make a voluntary disclosure to HMRC says the service is for individuals and companies disclosing Income Tax, Capital Gains Tax, Inheritance Tax, Corporation Tax, National Insurance contributions and Annual Tax on Enveloped Dwellings. It covers errors made despite reasonable care, through carelessness or through deliberate actions. Typical cases are a business that has not declared all its income, or one trading without registering for a tax.

It cannot be used for VAT. VAT errors are corrected on a VAT return where the conditions allow, or notified on form VAT 652 or by letter; see correcting VAT errors. Employers and CIS contractors are expected to correct PAYE and CIS errors themselves and only disclose separately when they cannot.

Is the Digital Disclosure Service the right route?

Situation Route named in HMRC’s guide
Onshore income or gains, any behaviour Digital Disclosure Service
Income, assets or gains outside the UK Worldwide Disclosure Facility, which is part of the Digital Disclosure Service
Only undeclared residential letting income Let Property Campaign
Deliberate behaviour where protection from criminal investigation is wanted Contractual Disclosure Facility under Code of Practice 9
Cryptoassets, till misuse, R&D relief claimed in error Dedicated HMRC services or forms

The Contractual Disclosure Facility is the only route that gives an assurance of no criminal investigation into the disclosed deliberate conduct. A Digital Disclosure Service disclosure does not carry that contractual protection, although HMRC says a full and unprompted disclosure suggests a civil rather than criminal investigation would be appropriate.

What are the steps?

  1. Notify. Tell HMRC through the service that you intend to disclose. No figures are needed at this stage. HMRC sends a disclosure reference number and a payment reference number. Each person or company needs a separate notification, so spouses disclose separately and a company and its director make two disclosures. Agents can notify for clients, and form COMP1a lets HMRC deal with the agent.
  2. Prepare and disclose. Work out the extra liability year by year, including interest and the penalty. The disclosure must be made within 90 days of the date HMRC acknowledges the notification.
  3. Make the offer. The disclosure ends with a letter of offer. Once HMRC accepts it, the offer and acceptance form a legally binding contract.
  4. Pay. Payment should reach HMRC by the same 90 day deadline. If you cannot pay in full, call HMRC and agree an arrangement before submitting the disclosure.
  5. Cooperate. HMRC reviews every disclosure and may ask for evidence. Failure to cooperate can lead to the offer being rejected.

If you notify and then find no disclosure is needed, you must tell HMRC; otherwise it will follow up. If something is missed after submission, contact HMRC straight away to amend it.

How many years must be included?

The number of years depends on behaviour. The guide says you pay what you owe for up to 4 years where you took reasonable care, up to 6 years where you were careless, and up to 20 years where you acted deliberately or failed to register for Self Assessment on time. Where an inaccuracy involves an offshore matter or transfer, the period is up to 12 years. These mirror HMRC’s assessing limits explained in how far back HMRC can go.

Recent years are handled differently. Income from the current tax year is not disclosed; it goes on the next return. Income for the year before the current tax year should go on that year’s tax return rather than in the disclosure. As at October 2026, HMRC’s guide says a disclosure can cover all tax years up to and including 2024 to 2025, but any return HMRC has issued for 2022 to 2023 onwards that is still outstanding must be filed instead. Companies should file outstanding Company Tax Returns for periods within four years and disclose earlier years.

How much lower are penalties for an unprompted disclosure?

A disclosure is unprompted if you make it before you have reason to believe HMRC has discovered or is about to discover the problem (CC/FS7a). Once a check has started, a disclosure is normally prompted. The behaviour and the type of disclosure set the range for inaccuracy penalties:

Behaviour Unprompted Prompted
Reasonable care No penalty No penalty
Careless 0% to 30% 15% to 30%
Deliberate 20% to 70% 35% to 70%
Deliberate and concealed 30% to 100% 50% to 100%

For failure to notify, CC/FS11 gives a non deliberate range of 0% to 30% if unprompted within 12 months of the tax being due, 10% to 30% if unprompted after that, and 10% to 30% or 20% to 30% if prompted. Deliberate failures use the same 20% and 30% unprompted minimums as inaccuracies. Penalties where the liability is offshore can reach 200%.

Where the penalty falls within its range depends on the quality of disclosure: up to 30% reduction for telling, 40% for helping and 30% for giving access to records. If disclosure is delayed for a long time, for example three years or more, HMRC will usually restrict the reduction so the penalty is no lower than 10 percentage points above the minimum. On the Digital Disclosure Service you calculate this yourself, using the factsheets, and explain your reasoning; HMRC may reject a disclosure with too low a penalty.

Illustration only. A sole trader realises she has under declared £10,000 of tax through careless record keeping. Disclosing unprompted with full cooperation, the careless range of 0% to 30% could reduce her penalty to nil, plus interest. If HMRC had opened a check first, the floor would be 15%, or £1,500. Had the omission been deliberate, the unprompted floor would be £2,000 and the prompted floor £3,500. More on behaviours is in penalties for tax return errors.

What happens after the disclosure is submitted?

HMRC sends an acknowledgement; if none arrives within two weeks, call the helpline. It then checks the disclosure and, if satisfied, sends a letter accepting the offer. Late payment interest runs daily from the date tax was due, and a disclosure without the right interest is rejected as incomplete; see late payment interest. HMRC will not publish the details of a deliberate defaulter who notifies, makes a full and accurate disclosure with payment by the deadline and cooperates.

What are the common mistakes?

  • Waiting until HMRC writes. HMRC says it is unlikely to accept a disclosure through this route once it has opened an enquiry or check, and the penalty floor will usually be higher.
  • Choosing the wrong behaviour. HMRC may not accept that someone in business for years with significant undeclared income was merely careless.
  • Combining two taxpayers in one disclosure.
  • Submitting without payment or an agreed arrangement.
  • Leaving out interest, or using HMRC’s calculator for a case with complex reliefs it is not designed for.
  • Missing the 90 day deadline because records were only gathered after notifying. Start collecting bank statements and estimates first.

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Sources

Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 8 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.