UK government extends Liechtenstein tax disclosure agreement

THE UK Government has extended its tax agreement with Liechtenstein, giving British taxpayers one more year to come clean about tax owed.

The Liechtenstein Disclosure Facility (LDF), which allows Britons with banks accounts in the tiny European principality to settle tax liabilities on favourable terms, was due to end to end in March 2015. But because of strong demand the disclosure facility will run until 5 April 2016.

The LDF has also been incorporated into a double taxation agreement between the two governments to ensure taxpayers will not be taxed twice on their income.

There have been more than 2,000 tax disclosures using the LDF since the agreement was signed in 2009, HM Revenue and Customs (HMRC) said.

David Gauke, Exchequer Secretary, said: "Today's agreement takes that commitment forward by providing greater transparency and certainty to the taxpayers of both our countries about how their incomes and gains will be taxed."

Richard Mannion, national tax director at Smith & Williamson, said the extension of the LDF was a "sensible" use of HMRC's resources for combating tax evasion, but questioned whether it was fair for some taxpayers to get "preferential treatment".