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HMRC Investigations Prompt Use Of LDF

by Robert Lee,, London

17 November 2015

Approximately 40 percent of individuals who have used the UK's Liechtenstein Disclosure Facility (LDF) were already being investigated by HM Revenue and Customs (HMRC), according to international law firm Pinsent Masons.

The LDF was launched in 2009 and will close for new registrations on December 31, 2015. It enables UK taxpayers to declare underpaid tax due on assets held in Liechtenstein. Those making a disclosure face a penalty of ten percent of the tax payable and will not be prosecuted for tax-related offences.

Pinsent Masons said that around 800 of the 2,000 LDF disclosures it is aware of were made because HMRC inquiries encouraged those involved to declare their unpaid tax liabilities through the facility. The firm added that the LDF has been adopted as a method of choice for UK taxpayers to declare unpaid tax due on assets they hold in the UK or globally. It estimated that one in five of those using the LDF had no overseas assets.

Paul Noble, Tax Director at Pinsent Masons, explained: "The LDF has given anyone that has evaded UK tax an unparalleled opportunity to put matters straight. It has truly presented a 'Get out of Jail' card to anyone wishing to correct their tax affairs. Whilst the LDF has given this opportunity to anyone with serious problems to come in from the cold it has also given an opportunity for those that simply became confused by assets they inherited overseas to normalize their tax affairs."

TAGS: individuals | compliance | tax | tax compliance | tax avoidance | law | Liechtenstein | United Kingdom | tax authority | offshore | HM Revenue and Customs (HMRC) | revenue statistics | penalties | HM Revenue and Customs (HMRC)

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