HMRC are expecting to rake in three times as much money from the Liechtenstein Disclosure Facility as first thought after scores of tax evaders have moved their cash from other offshore destinations to Liechtenstein’s banks in order to take advantage of HMRC’s ‘good deal’.
Dave Hartnett, UK’s Permanent Secretary for Tax, has indicated the returns on the scheme would be closer to £3bn than the £1bn originally anticipated.
“Some in the media are saying that the results from the LDF are smaller than they thought, but that’s just not right” he said in a recent interview.
Getting on for 1,200 people have now come forward through the Liechtenstein Disclosure Facility and there is more than four years to go. The people who have come forward are changing their ways and getting peace of mind, and are getting a good deal on penalties. We are getting money for the Exchequer.”
Whilst the increased revenue is positive news for UK finances as a whole those taking advantage of the Liechtenstein Disclosure Facility will also reap the awards as the HMRC tax penalty rate on undeclared income is set on just 10%.
This, in comparison with the normal 100% maximum tax penalty, is comforting to those with undeclared offshore income.
In addition to the lower fixed rate tax penalty, those disclosing additional income will only be taxed for the previous ten years rather than the usual 20 years.
It is also understood that HMRC are currently in talks with Switzerland to agree a deal in relation to cash held in Swiss banks.
The talks come after the UK and Switzerland signed a joint declaration in October of last year to begin to work towards sharing information on tax issues.
A ‘withholding tax’ which would make UK taxpayers with Swiss bank accounts pay tax on any interest earned has been suggested.
Account holders are expected to be forced to pay between 25% and 35% on any income earned from cash stored there in exchange for retaining anonymity.
Sources close to the talks have said they hope to raise a further £3bn-£6bn from the deal suggesting there may be as much as £100bn hidden away from the taxman in Swiss accounts.
Dave Hartnett seems to be positive about the future success of the LDF and proposed future schemes saying:-
“The progress that’s been made tackling international tax evasion and opening up the tax havens is the most significant development in tax administration of recent years. The government of Liechtenstein showed the way forward working with us to set up the first international tax disclosure opportunity. This has worked to the mutual benefit of both countries. Other countries are following Liechtenstein’s lead. Tax havens won’t go away overnight but secrecy laws promoting tax evasion are under pressure as never before.”
Kinsellatax would be delighted to arrange for aLiechtenstein Disclosure Facility for ANYONE who has an overseas bank account, whether it is in Liechtenstein or not.
For more information on any of the specialist tax investigation services we offer pick up the telephone NOW and call 0800 471 4546 or click here to fill in a tax enquiry form.