UK Taxpayers Volunteering Offshore Info

January 12, 2011 International Tax CooperationOffshore BankingTaxation in LiechtensteinTaxation in UK

Day 62The HM Revenue & Customs is expecting a GBP 2 billion boost in its revenue levels over the next four years, after much greater than expected numbers of taxpayers voulentarily disclosed hidden assets in Lichtenstein.

Speaking in a media interview Dave Hartnett, the Permanent Secretary for Tax at the UK HM Revenue & Customs (HMRC), revealed that the Government’s Lichtenstein Disclosure Facility (LDF) is now expected to achieve three times the revenues levels than originally projected. The LDF allows taxpayers with undeclared assets hidden in Lichtenstein to disclose their financial affairs in return for reduced penalty rates on any unpaid taxes.

According to Dave Hartnett, over 1 200 taxpayers have already come forward and declared their hidden assets through the LDF, since the program started in September 2009. The Minister added that the LDF will continue running until March 31st 2015, indicating that much greater numbers of taxpayers could still come forward. With the amount of disclosures being made, the HMRC has revised the profit estimates for the LDF to GBP 3 billion over the program’s lifetime, compared to the initial projection of GBP 1 billion.

Under the LDF taxpayers who come forward with full disclosures of their previously hidden assets and unsettled tax liabilities will only be levied a 10 percent penalty. Typical HMRC tax-evasion investigation procedures can see penalties of 100 percent levied on any unpaid taxes. Additionally, tax liabilities will only be assessed for the previous 10 years on any information brought foward through the LDF, unlike the currently operating New Disclosure Opportunity program which has an assesment period of 20 years. Dave Hartnett suggested that the reduced penalties are compelling taxpayers with hidden assets in offshore financial centres around the world to make transfers to Lichtenstein, in order to utilize the LDF. Describing the overall success of the program Dave Hartnett said, “..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.”

Photo by adamwilcox

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