View more on these topics

Tax avoidance overhaul may prompt wave of confessions

Government plans to close a tax avoidance disclosure facility may generate a surge of business for HMRC, according to experts.

As part of the Budget, the Government said it would bring forward the April 2016 closure of the Lichtenstein Disclosure Facility to the end of this year.

The Lichtenstein mechanism offers those who admit avoiding tax through offshore accounts a maximum penalty of 10 per cent on top of tax owed and interest, as well as immunity from criminal prosecution.

However, the new regime will bring in 30 per cent penalties, as well as scrapping immunity in some cases from the end of this year.

BDO partner Dawn Register says the potential for prosecution may drive penitent evaders either to a regime designed for onshore tax dodging, or away from disclosure altogether in the long run. Evaders caught without disclosure face a maximum 200 per cent penalty.

Register says: “Prosecution could certainly drive people away from using it. There is also Code of Practice 9, which does give immunity from prosecutions, but the down side is that there is no fixed penalty.

“If people come to me I would possibly tell them to use COP9 rather than this new facility that potentially wouldn’t give them immunity.”

Wingate Financial Planning director Alistair Cunningham adds: “The simple message is that if you need to make a disclosure, do it sooner rather than later.”


News and expert analysis straight to your inbox

Sign up


There are 3 comments at the moment, we would love to hear your opinion too.

  1. correlationstreet 19th March 2015 at 11:34 am

    Once again the terms “avoidance” and “evasion” used interchangeably, poor journalistic standards.

  2. Immunity from prosecution? Perhaps in this instance but your card would be well and truly marked as having committed a crime.

  3. @Mark Sands – Ill go check my dictionary as I am sure there is a difference between avoidance and evasion….. 🙂
    I am a simple person and without finding my dictionary, as I understand the meaning;
    You can avoid tax by using an ISA, pension, VCT, EIS, Insurance Bond (defer tax) and the legitimate tax reductions laid down by law this allows.
    You evade it by placing it somewhere where it remains taxable but often untraceable without divulging it your self. Hiding your tax liability doesn’t stop the liability existing.
    If something avoided tax and was legal at the time, you cant make the original act illegal. You can become illegal going forward if you fail to change it if the law is subsequently changed. Fox hunting is illegal for instance, but you cant prosecute someone who did it when it WAS legal.

Leave a comment


Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm