HMRC announced three more disclosure facilities in quick succession as they attempt to tighten the net on tax evaders operating closer to the UK. Memoranda of understanding have been signed with the Isle of Man, Jersey and Guernsey in the last few months meaning more and more taxpayers could be under scrutiny.
Whilst co-operation with HMRC from the above jurisdictions is another nail in the coffin for tax evaders operating off the coast of the UK, these disclosure facilities offer a great opportunity for individuals to wipe their slate clean and take preemptive action.
If individuals come forward under one of the disclosures they will be liable to reduced penalties – which can result in sizeable savings when compared to an ad hoc disclosure or HMRC investigation.
However the disclosure facilities do not offer immunity from criminal prosecution, therefore individuals may wish to disclose using the Liechtenstein Disclosure Facility (LDF). The LDF can be used on worldwide assets providing sufficient funds are transferred to a financial intermediary in Liechtenstein. The LDF offers both reduced penalties (as low as 10%) and immunity from criminal prosecution.
This is certainly an area in which to be proactive on as under the terms of the agreements the jurisdictions will provide HMRC with details of suspected evaders in due course.
Therefore disclosing to HMRC before they come ‘knocking’, not only secures reduced penalties but also allows individuals a greater element of control as to the manner and time frame in which they disclose. This offers piece of mind to the individuals involved.
In addition to the above HMRC are also looking to sign similar agreements with British overseas territories. There are 14 such territories including Bermuda, the British Virgin Islands and the Cayman Isles.