RSM is warning individuals in the South West that have tax irregularities that time is running out to come clean to the taxman as the popular Liechtenstein Disclosure Facility (LDF) finally closes on 31 December 2015.
The LDF was introduced by HMRC in September 2009 to encourage individuals to declare any unpaid taxes connected with overseas bank accounts or structures. Under the agreement, those coming forward to make a disclosure would not only be immune from prosecution, but also secure considerably more favourable terms for settling their tax bill than under normal circumstances.
The LDF has been enormously attractive to date, and since its introduction six years ago, more than 5,900 disclosures have been made, raising over £1.15 billion.
However, in his Budget last March, the Chancellor announced that the final date for those wanting to register under the LDF would be 31 December 2015.
HMRC has since announced that it will run one final disclosure between 2016 and 2017 and although the terms of this are not yet known, they are believed to be significantly less beneficial than the LDF.
Matthew Sewell, tax partner at RSM in the South West said: “The LDF initiative has been hugely popular, allowing HMRC to collect large sums of money without having to divert resources away from carrying out tax investigations.
“After December 31st individuals are likely to face higher settlements and potentially no immunity from criminal investigation or prosecution, so those who have irregularities in their tax affairs are advised to come clean as soon as possible. HMRC is sending a very clear message that deliberately avoiding paying the correct amount of tax will not be tolerated, and tax evaders will soon find that there are fewer places to hide.”