North West business advice specialist, Champion Accountants, is urging individuals across the area to declare any unpaid overseas tax before time runs out.
Less than 100 days remain before people lose the right to disclose any unreported liabilities connected with assets held overseas under far more favourable terms than usual with HMRC.
Known as the Liechtenstein Disclosure Facility (LDF), it stems from an agreement between UK and Liechtenstein governments to enable those untaxed income or gains connected with overseas bank accounts or structures to settle with HMRC under more beneficial conditions than other tax investigations.
Yet the taxman’s increasingly aggressive stance around offshore activity means this opportunity will draw to a close on 31 December 2015, something which will most likely result in an increase in targeted investigations during 2016 against those who didn’t come forward before the deadline.
With this in mind, it is crucial that individuals take advantage of these worthwhile terms to help bring their tax affairs in order before it’s too late.
Under LDF, there is no liability for tax matters arising before 6 April 1999 and a low fixed penalty rate of 10 per cent for those between 6 April 1999 and 5 April 2009, which compared to a normal enquiry, can be as much as the tax owed.
In addition, participants using LDF will not be named and shamed following settlement of the unpaid tax – a controversial tactic which HMRC is using increasingly to profile deliberate tax evaders.
There is also an immunity guarantee from prosecution against tax-related offences, provided that a full disclosure is made.
Gill Molloy, group tax director at Champion Accountants, said: “Since LDF was introduced in September 2009 it has yielded more than £1bn for HMRC from around 6,000 cases. Yet in most instances individuals didn’t realise that they were non-compliant, particularly non-domiciled persons and those involved in complex offshore trusts and structures.
“LDF is being replaced with a much tougher worldwide disclosure facility that HMRC says will penalise anyone who doesn’t take the opportunity to come forward. That’s exactly why we’re urging everyone to get advice in confidence and facilitate these conversations with HMRC before the clock runs out.”
Champion Accountants has advised clients with a range of issues that require direct negotiation with HMRC for more than 40 years and has excellent links with a number of niche specialist advisors, should it be a more complex case.