Liechtenstein deal lets offshore savers off hook

UK citizens are virtually assured of immunity from prosecution under the latest tax amnesty, even though protection is not explicitly offered by the taxman, say advisers.

Experts believe immunity, agreed last week by HMRC for UK citizens with accounts in Liechtenstein, is likely to apply, unofficially, to account holders subject to an amnesty focused on 300 foreign banks that so far includes no offer of safety from prosecution.

Speaking on Accountancy Age TV, Gary Rowson, head of investigations and enquiries at Vantis, said it was ‘extremely unlikely’ that those who make full disclosures under the UK amnesty – or new disclosure order – would face prosecution.‘

That’s an all but guaranteed [from] a full disclosure,’ said Rowson.

Heather Taylor, a tax investigations senior manager at Grant Thornton, said protection from prosecution was a ‘hopeful view’, but added that legal action was unlikely.

With high-profile prosecutions still anticipated from the UK’s first tax amnesty in 2007, Sue Holmes, national head of Smith & Williamson’s tax investigations practice, said those making full disclosures were unlikely to have to face the courts.

‘We’ve heard there’s a prosecution pending [from the first amnesty] but, as long as people come forward and disclose, it’s unlikely they’ll prosecute.’

The taxman is expected to send out formal notices under schedule 36 of the Finance Act to the 300 institutions over the next two weeks, telling them to hand over details of account holders. They will then have 30 days to comply.

HMRC is likely to ask for: the name of the account holder; date of birth; address and postcode; date the address was last checked; other names under a joint account; the account number; the date the account was opened or closed; balances between 31 March 2004 and 31 March 2009; and transaction details – that is, those taking place within the first three months the account was opened or closed including dates, amount in sterling, debit or credit, then the balance after the transaction.

HMRC said: ‘HMRC’s policy is to deal with fraud by use of the cost effective civil investigation of fraud procedures, wherever appropriate.

Criminal investigation will be reserved for cases where HMRC needs to send a strong deterrent message or where the conduct involved is such that only a criminal sanction is appropriate.

‘We prefer voluntary cooperation but cases have been investigated and we do not discount prosecutions in the future.’