The terms of the new tax amnesty announced recently between HM Revenue and Customs (HMRC) and the Liechtenstein authorities puts those who will file under the UK’s New Disclosure Opportunity at an unfair disadvantage, says PKF Accountants and business advisors.
The Liechtenstein tax deal offers account holders the opportunity to settle any unpaid tax with only a 10% penalty and going back only as far as 10 years. In contrast, the NDO, set to begin in September this year, is asking UK taxpayers with investments in other offshore jurisdictions to declare unpaid tax as far back as 20 years. In some cases they may also have to pay a 20% rather than a 10% penalty.
John Cassidy, Tax Investigations partner at PKF, said: “It is wholly unfair that there are different rules for those with investments in Liechtenstein and those with investments in other offshore jurisdictions."
“The rights or wrongs of how the original data for Liechtenstein was obtained are one thing, but to make it clear that the data was not even used, by offering an amnesty, takes the situation to another level. The disparity of terms between the new amnesty and the NDO is the final nail in the coffin.”
Cassidy continued: “For those with investments in Liechtenstein there is no doubt that this is a great opportunity to declare any undeclared income or gains and square matters away with HMRC once and for all so I would urge people to make use of the facility. But I also urge HMRC to align the terms of the NDO with this new amnesty.”
“Anecdotal evidence suggests that the 20-year time limit had a hugely negative impact on the overall amount of tax that HMRC collected for the previous amnesty, the Offshore Disclosure Opportunity (ODF) in 2007, as many were put off by the sheer enormity of the project; 20 years was simply seen by many as too daunting. Today’s news only provides a further disincentive for those supposed to use the NDO simply because they banked in a different place.”
A comprehensive report in our Intelligence Report series, examining in depth the situation of offshore transparency and secrecy in a number of the most prominent jurisdictions, is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report2.asp
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