I would disclose it, and explain how your character has changed (eg have you been volunteering, contributing to the community in some way?)
Consult the good character guidance
https://assets.publishing.service.gov.u ... racter.pdf
Deception and dishonesty
This section explains the types of deception or dishonesty to consider when
assessing good character in citizenship applications.
General approach
Concealment of information or lack of frankness will raise doubt about, and therefore
reflect poorly on, the applicant’s character.
An application will normally be refused only where the person has attempted to lie or
conceal the truth about an aspect of their application, whether on the application
form or in the course of enquiries, including where they have knowingly provided
false personal details, for example date of birth, name or nationality.
The information in this section has been removed as it is restricted for internal Home
Office use.
Official – sensitive: end of section
The information in this section has been removed as it is restricted for internal Home
Office use.
Official – sensitive: end of section
Failure to disclose information required in a nationality
application
Where the applicant fails to disclose information that would result in the application
being refused on good character grounds, the application must be refused and any
further application for citizenship will normally be refused for the next 10 years. This
applies unless it is accepted that the failure to disclose was unintentional and a
genuine error.
Deception in previous applications
An application will normally be refused where there is evidence that a person has
employed deception either:
• during the citizenship application process
• in a previous immigration application in the previous 10 years
It is irrelevant whether the deception was material to the grant of leave or not.
An application will normally be refused if there has been any deception in the 10
years prior to the application for citizenship. For these purposes, the deception is
regarded as continuing until the date on which it is discovered or admitted. For
example, if a person used deception in an application in 2008, but that was
discovered or admitted to in 2010, the 10-year period would start in 2010.
Now for you the issue is: when does your period of "no deception" start?
I would argue that you were discovered when your ILR application was refused in Sept 2017 - so I would suggest the safest approach is to wait until Oct 2027, when your Tier2 skilled visa was granted.
I can imagine this is not the answer you were looking for, but the facts of the matter are that you deceived the HO, corrected the mistake by paying your taxes but you still tried to use the deception to obtain ILR. Even though you haven't offended since, you technically got away with the immigration deception until you were found out in 2017 in my interpretation.
This is why I suggest you wait for a couple more years on ILR to be on the safe side.
All advice comes from personal research and experience and should not be regarded as professional opinion.
