In recent times, advisers have been assisting clients with making voluntary disclosures to HMRC (often utilising the benefits of the Liechtenstein Disclosure Facility – LDF). But all of this is about to change. As from 31 December, the LDF and the three Crown Dependency disclosure facilities will end. This will herald a new era in HMRC’s attack on the offshore arena and although it has already been announced that a new disclosure facility will launch in April 2016, it will not be a beneficial as the LDF.
HMRC decided to close the disclosure facilities earlier than initially advertised due to the introduction of Intergovernmental Agreements (IGAs) and Common Reporting Standard (CRS). CRS agreements have been signed by over 90 countries. Under them, overseas banks and other financial institutions will automatically inform HMRC about assets, income and gains of all their investors who appear to live in the UK (for example, if they have a UK address). The aim of the CRS is (of course) to ensure that individuals pay the correct amount of tax on assets held overseas.
With the end of the most beneficial disclosure facility that has ever been, HMRC will be moving their elite team of investigators into “attack” mode. Advisers and clients should be on the lookout for an increase in “Code of Practice 9” (Cases of suspected tax fraud) investigations, as well as (in the most serious of cases) criminal investigations.
Life will start to get a lot tougher after 1 January and if you receive an investigation from HMRC, please take advantage of BKL’s offer of an initial no cost and confidential meeting in order to discuss a strategy to respond to HMRC’s enquiries.
We can provide testimonials from clients and referrers in respect of advice and support provided either during a tax investigation or tax disclosure.
For more information, please get in touch with your usual contact partner or use our enquiry form.