12 things you want to know about the Liechtenstein Disclosure Facility

The Liechtenstein Disclosure Facility (LDF) is not limited to taxpayers with accounts or assets in Liechtenstein. It is part of HMRC’s Tax Amnesty initiatives – to encourage full disclosures of tax irregularities, especially those related to offshore bank accounts and assets.  Crucially however, it is not limited to taxpayers with bank accounts or assets outside the UK (in Liechtenstein or otherwise).  If you are already under investigation by the taxman, or want to make a voluntary disclosure, then Lynam Tax Enquiry Experts can help you take advantage of the generous terms on offer through the LDF.

1.  The Liechtenstein Disclosure Facility is an HMRC initiative enabling UK taxpayers to clean up historic tax irregularities by registering for the scheme and then going on to make a full disclosure; in return for very favourable terms.

2.  It’s available to anyone: not just people with undisclosed tax liabilities related to offshore bank accounts or assets.  And there is no necessity for a prior link with Liechtenstein!  Lynam Tax can advise further on this key matter.

3.  LDF registration comes with a guarantee that HMRC will not prosecute in respect of the full disclosure: the only way to get such an immunity.

4.  The Disclosure has to cover all relevant years, but usually only from 1st April 1999; which is much less than the normal 20 year time limit for most taxes, and the indefinite period for Inheritance Tax.

5.  Accepted Disclosures will usually qualify for fixed penalties of 10% or 20% – compared to the maximum penalties of 100% or 200%.

6.  The LDF covers all taxes: e.g.  Income Tax, Corporation Tax, VAT, CGT, IHT.

7.  The LDF is not available to anyone being investigated under HMRC’s Contractual Disclosure Facility procedures (i.e. Code of Practice 9), or under criminal enquiry, at the date of attempted registration.

8.  LDF registration runs from 1st September 2009 to 31st March 2016.

9.  Taxpayers can elect to use a special flat tax rate of 40% to cover all taxes: which can be especially useful for traders with multiple taxes on the same income (e.g. higher rate Income Tax, plus VAT, NIC etc), or people who recived gifts where IHT should have been paid.

10.  Advisers can make the Disclosure on your behalf but you have to confirm its accuracy.

11.  Full payment of all tax, interest and penalties must normally be made with the Disclosure; but time to pay arrangements can sometimes be agreed.

12.  People who don’t disclose now, and are subsequently found by HMRC to have tax liabilities relating to offshore assets/accounts, can expect swingeing penalties of between 70% – 200%  (plus the underlying tax and interest) or risk criminal prosecution and Confiscation Orders.

These are by far the most generous terms ever offered by the taxman.  The LDF process can be straightforward in simple cases.  But there are many pitfalls for the inexperienced, and for people with more complex tax affairs.  Badly managed Disclosures can have a negative effect; leading to very high penalties, a Code of Practice 9 (fraud) investigation, or even prosecution.

Lynam Tax Enquiry Experts have substantial experience of all the various Tax Amnesties, and are already helping a significant percentage of all the taxpayers who have so far registered for The Liechtenstein Disclosure Facility. In particular we can help taxpayers who do not have any Liechtenstein links to take advantage of the exceptional terms available; and are already doing so for a significant number of clients, with the full blessing of HMRC.

Act now.  Call Paul Lynam today on 0845 643 9997 – for a no obligation, confidential consultation.