Liechtenstein deadline "will be pushed back"
Deadline for Liechtenstein banks to investigate customers will almost certainly be extended
THE DEADLINE FOR Liechtenstein banks to investigate their UK clients will almost certainly be pushed back until after October, advisors have said.
Under the agreement that created the Liechtenstein Disclosure Facility, Liechtenstein banks must contact customers to see if they have links to the UK by October this year. Their customers must either declare themselves to be UK tax compliant or they must join the LDF – which offers low penalties and immunity to prosecution for undisclosed liabilities – within 18 months of the initial contact. If they fail to do so, the Liechtenstein banks must refuse to keep their custom under the terms of the agreement.
However, John Cassidy, tax investigations partner at PKF, said that Liechtenstein banks have not begun the process yet because of uncertainty over a mooted deal with Switzerland, which is due imminently. Although Swiss advisors are now advising customers to use the LDF, the Liechtenstein banks have concerns about the risk of customers moving money to Switzerland.
Because of this, it is more than likely that HMRC will extend the deadline for Liechtenstein banks until the Swiss agreement is announced, he said.
Figures obtained by Accountancy Age showed that 475 disclosures had been made under the LDF from its inception in September 2009 to March 2011, raising on average £300,000 per disclosure.
Cassidy said this “was a trickle and the tap will be turned on” when the Liechtenstein banks begin their investigations.
Gary Ashford, national head of tax risk at RSM Tenon, said that the rate of registrations would likely increase as Liechtenstein banks begin reviewing their own clients.
This should increase the average because, historically, the sums of money in Liechtenstein banks are significant, he added.