United Kingdom

Important Notes on Timing of Disclosures Under the LDF 

Important Notes on Timing of Disclosures Under the LDF
There is a misconception that those with undisclosed liabilities can wait until 2016 and then disclose for the 10 years prior to that date.  However, if the disclosure is delayed to 2016 the period that would have to be included in the disclosure is 6 April 1999 to 5 April 2015 - it is not a rolling ten year window. 

Additionally, some of the key aspects of the Liechtenstein Disclosure Facility (LDF) (the CRO and the guaranteed 10 percent penalty) are only available for the period 6 April 1999 to 5 April 2009.  Thereafter, normal tax rules will apply including from 6 April 2010 an increase in the top rate of tax from 40 percent to 50 percent.  

If a penalty is due for years after 5 April 2009 it will be charged in accordance with the law applicable at the time and may reflect future budget changes. However, the 2009/10 and 2010/11 penalties will be 30 percent of the underpaid tax in cases of suspected serious fraud and 20 percent of the underpaid tax in other cases. In addition, from 6 April 2011, the new offshore asset penalty regime will apply, so that penalties (as above) will increase to a multiple of 1.5 times for a category 2 country and will double for a category 3 country.

HMRC is considering whether a single charge rate (SCR) will be available as an alternative to the CRO for calculating liabilities under the LDF. HMRC will consider each tax year (to 2014/15) in isolation after the year has ended.  If a SCR is made available HMRC will announce publicly the terms, procedures and rate of charge at the appropriate time. The single charge rate (SCR) is available for the 2010-11 tax year in 'limited terms', including a 50 percent charge, and only for those holding relevant property in Liechtenstein on 1 September 2009.


Those with undisclosed UK tax liabilities should consider making a LDF disclosure for all years up to and including 5 April 2009 now. Consideration will need to be given to years after 5 April 2009 as to whether to include them in the LDF or whether amending a Tax Return is still possible.

Contact

Please call our helpline on 0800 970 9690 for a free no obligation discussion.

Alternatively, please contact Derek Scott on derek.h.scott@kpmg.co.uk or 020 7311 2618.