THE LIECHTENSTEIN DISCLOSURE FACILITY will come to an end earlier than originally scheduled when HM Revenue & Customs ceases operating the regime on 31 December 2015.
The LDF enables Britons to obtain a generous settlement with HMRC on any undisclosed tax liabilities held in offshore bank accounts, by rerouting funds through the tiny European principality.
Last year, HMRC tightened the terms of the regime, restricting access to some of the favourable terms offered by the LDF is in certain circumstances, such as failing to disclose liabilities in full.
It was expected to run until April 2016 after strong demand for the scheme saw the deadline extended. It was originally slated to end in March 2015.
However, following the Fifth Joint Declaration – an amendment to the Memorandum of Understanding between the UK and Liechtenstein – the final date for any person to apply to register to participate in the LDF will be 31 December 2015.
The crown dependency facilities in Jersey, Guernsey and the Isle of Man are also being closed earlier on 31 December 2015.The government announced in the March Budget that a final worldwide disclosure facility from 1 January 2016.
“The details are not yet known, but the terms will not be as beneficial as the LDF,” Watt Busfield Tax Investigations co-founder Rebbecca Busfield told Accountancy Age. “It is unlikely there will be immunity from prosecution, penalties are likely to be approximately 30% of the unpaid taxes and it is unlikely to clear away past inheritance taxes.”
Since the regime was established in 2009, more than 6,400 people and companies have registered to participate in the LDF; more than 5,900 disclosures have been received and the LDF has raised more than £1.15bn.
DLA Piper head of investigations Simon Airey said: “From next year HMRC will start to receive unprecedented information in relation to financial accounts held overseas and have committed significant resources to use this information to track down tax evaders.
“Individuals will therefore need to act now if they think that they may have any undeclared liability to disclose.”
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