More than 2,400 people have registered to disclose unpaid tax under the Liechtenstein Disclosure Facility (LDF) with £363m already paid in tax bills.
The LDF is now expected to bring in up to £3bn by 2016 based on the current numbers of disclosures.
The figures were released as the UK and Liechtenstein prepared to sign a double taxation agreement (DTA) on 11 June 2012. HMRC says the DTA will remove obstacles to investment and other cross-border economic activity, and will give businesses increased certainty about their tax treatment.
At the same time, the UK and Liechtenstein will sign a third Joint Declaration on the Memorandum of Understanding (MOU) on cooperation in tax matters. This further clarifies the Liechtenstein Disclosure Facility and the Taxpayer Assistance and Compliance Programme arrangements between the parties. It makes available a Single Charge Rate of 50% that Liechtenstein investors might apply to calculate undisclosed UK tax liabilities for the tax year 2010/11.
The agreement allows investors in Liechtenstein who are liable to UK tax to legitimise their tax affairs for the past and ensure they are tax-compliant for the future. It is underpinned by a tax information exchange agreement, signed in August 2009, and by special legislation in Liechtenstein.
The LDF was signed in August 2009 and was originally scheduled to run from 1 September 2009 to 31 March 2015. It has since been extended to 5 April 2016.
By the end of the facility it is expected that all UK taxpayers holding assets and investments in Liechtenstein will be fully compliant with their obligations under UK tax law.
Parliament is expected to ratify the agreement this year, so it can take effect from 1 January 2013.
Dave Hartnett, permanent secretary for tax at HMRC, said: ‘The third Joint Declaration recognises the overwhelming success of the LDF. HMRC originally estimated the number of people who would register for the disclosure facility at 2,000, and that it would probably produce £1bn. In light of the ongoing success of the LDF we now anticipate the arrangements will produce up to £3bn from a much larger number of people.”
Source – Accountancylive.com – 11 June 2012