HMRC Is Shite

HMRC Is Shite
Dedicated to the taxpayers of Britain, and the employees of Her Majesty's Revenue and Customs (HMRC), who have to endure the monumental shambles that is HMRC.

Friday, 21 August 2009

Confusion

There appears to be a wee bit of confusion in the HMRC bunker over the rules wrt its recently announced tax amnesty for undeclared offshore accounts, and the treatment given to those with accounts in Liechtenstein.

International Adviser reports that the confusion may allow tax evaders to switch assets to Liechtenstein, in order to benefit from the less onerous fine.

There are two disclosure facilities:

- The Liechtenstein Disclosure Facility (LDF)

- The New Disclosure Opportunity (NDO).

Both require filing notifications of intention to disclose by 1 September.

There appears to be the opportunity for tax evaders to move their undeclared offshore holdings (outwith Liechtenstein) to Liechtenstein, and declare under LDF rather than NDO.

International Adviser (IA) asked HMRC about this and was told that the LDF was:

"only for new or existing investments [in Liechtenstein] at 1 August 2009".

However, in response to another IA query, HMRC apparently said that individuals with investments that have been made directly with offshore financial intermediaries "will be able to move their money to Liechtenstein after the end of the registration period for [the] NDO, and then use the full terms of the Liechtenstein disclosure facility".

The LDF offers a 10% cap on the penalties, compared with the 20% cap on NDO.

In its statement today, HMRC said:

"HMRC has the legal power to obtain information on investments where they have been opened through a UK branch or agency – say a branch of a bank in the UK.

Anyone with investments of this sort could move their investments to Liechtenstein after the end of the registration period for NDO, and use the Liechtenstein disclosure facility.

But they will get the same terms as the NDO.

People with investments they have made direct with offshore financial intermediaries will be able to move their money to Liechtenstein after the end of the registration period for NDO, and then use the full terms of the Liechtenstein disclosure facility.

They will of course have to disclose everything to HMRC in that case, or the new Liechtenstein laws will mean that they have to remove their investments or face sanctions
."

Well, I am none the wiser.

Maybe HMRC are being paid commission for advertising Liechtenstein as a tax reduction opportunity?;)

Or maybe they simply haven't thought it through yet?

Tax does have to be taxing.

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