The Lichtenstein Disclosure Facility (LDF) is the best ‘deal’ that HMRC has offered in respect of its various disclosure campaigns announced in recent years. Originally extended to April 2016, the LDF closure was brought forward to December 31st 2015 in this year’s budget.
In an effort to encourage tax compliance the LDF was introduced which gave individuals and organisations favourable terms under which they could disclose undeclared offshore assets.
This is now all due to change from the 31st December 2015.
The current terms of the LDF are;
- Immunity from prosecution
- Disclosures limited to liabilities after 6 April 1999. Under normal circumstances HMRC will assess 20 years in cases of deliberate omissions of tax
- A fixed 10% penalty for 10 years until 5 April 2009. Normally, HMRC will seek a penalty of between 30% to 100% for deliberate omissions. Under new legislation HMRC can charge a penalty of up to 200% of the avoided tax where the offshore bank account is held in certain jurisdictions.
After the 31st of December 2015, HMRC will no longer be accepting new registrations into the LDF. Between 2016 and 2017 there will be a tougher stance against undeclared offshore assets which could include;
- Increased penalties of at least 30%
- No immunity against prosecution
It is very important` to realise is that although the LDF had originally been extended to 16 April 2016, it was announced in the 2015 budget that it will end on 31 December 2015.
If you would like any further information about the Lichtenstein Disclosure Facility and how it may affect you or your company, please contact Steve Clunn for a completely confidential initial discussion.
Kate Jolly
Kate co-founded Briars in 1991 with Andrew Brierley. She specialised in tax law and today continues to advise clients on international operations, particularly land, expand and exit! In her spare time Kate is a Past Master of the City of London Guild of Entrepreneurs and a Director of CCARHT (Cambridge Centre for Applied Research into Human Trafficking).