HMRC’S Leichtenstein Disclosure Facility
We need to make you aware of new penalties being introduced by HMRC and their related disclosure facility. We do not anticipate that either will be relevant to the majority of our clients but thought it appropriate to being these matters to your attention
New penalties of up to 200% of the tax liability are to be introduced from 1 April 2011 for previously undisclosed offshore income or gains, depending on the country where the income was ‘hidden’.
The disclosure facility enables taxpayers with undeclared UK tax liabilities connected to bank accounts or assets in Leichtenstein to bring their tax affairs up to date on beneficial terms. However, even though it is entitled Leichtenstein, the facility is not limited to moneys held in that jurisdiction alone.
The benefits include immunity from prosecution, and a fixed 10% penalty on the undeclared tax. An added advantage is that this facility can also be utilised for undeclared UK bank accounts. Additionally, those making a full disclosure under the LDF will not be subject to the ‘naming and shaming’ provisions which otherwise can apply in relation to certain offences committed after 1 April 2010.
If you have any concerns about your tax affairs, please speak to us as soon as possible.