HMRC plans separate Liechtenstein amnesty

Negotiations on the details of a tax amnesty for British investors in Liechtenstein will be stepped up this week, with HM Revenue and Customs confident the jurisdiction will comply with a request to obtain UK taxpayers details.

Dave Hartnett, permanent secretary for tax at HMRC, has been negotiating the details of the amnesty with officials in Liechtenstein. He said the jurisdiction was identified as a target following HMRC’s realisation it had data on 300 UK residents with undisclosed accounts in the principality.

‘We were getting access to material that we hadn’t seen before – we had a mass of information. We didn’t see much information that appeared to be straightforward or honorable. We knew within banking secrecy that these customers were hiding information from tax administrations around the world,’ he said.

Hartnett said original discussions were entered into with the Liechtenstein Bankers’ Association, which focused on the UK gleaning information for past and present UK residents with accounts in the jurisdiction.

‘They said their laws didn’t allow for it but, as of last week, there was an arrangement made and we’re prepared to offer a reasonable approach,’ he said.

Hartnett conceded that despite the secrecy laws governing Liechtenstein, he’s confident that discussions already held with the government there will ‘hopefully result in a good process’.

HMRC announced the plans for a separate tax amnesty for Liechtenstein in addition to a broader UK amnesty due to start shortly.

Hartnett expects the Liechtenstein action alone to generate ‘hundreds of millions’ from British residents with accounts held in the tax haven. It is estimated that£1bn-£3bn of funds are held there.

The penalty for both amnesties is yet to be determined but, according to Hartnett, the rate applied to either will not be less than the 10% of outstanding tax incurred by taxpayers in the 2007 amnesty.

‘This is the last chance for people with undisclosed offshore accounts to come forward. My message is a simple one - come forward,’ he said.

Last week, Accountancy Age revealed HMRC had sent 30 institutions a letter inviting them to comply with a request for details of customers with accounts held offshore.

Hartnett confirmed a further 20 letters have been sent this week, and the department is now in consultation with as many as 50 institutions with ‘a lot more to talk to.’