

With Only Two Years Left, Time Is Running Out For A Significant Improvement
The revenue that the Government will generate from the Liechtenstein Disclosure Facility (LDF) is likely to fall significantly short of its £3bn target – warns national law firm Irwin Mitchell.
With only two years before the LDF is due to finish on 5 April 2016, there is unlikely to be a significant surge in the number of new cases to impact on the eventual yield. Over the life of the LDF (to February 2014), there has been an average of 102 registrations per month; over the 12 months to February 2014, that figure has fallen to 94.
The original yield target for LDF was set at £1bn and although this was later increased by HMRC to £3bn, the revenue generated by LDF cases stands at only £914m (as at February 2014, latest figures available).
Based on HMRC’s figures, and the likely number of new registrations, Irwin Mitchell predicts that the LDF yield may be less than £1.4bn by the time it closes to new cases on 5 April 2016. Once the reducing number of recent registrations is taken into account, the law firm says that the final figure could be even lower.
Phil Berwick, partner* and Head of Contentious Tax at law firm Irwin Mitchell, said:
Launched by HMRC in 2009, the LDF allows taxpayers with unpaid tax to settle their liability with HMRC whilst avoiding a criminal investigation. In most circumstances, this is on very favourable terms, when compared to using the normal rules. In some instances, HMRC forego some of the tax that is due, and the penalty applied is usually lower than the amount charged outside the facility. The LDF closes to new registrations on 5 April 2016.
* Non-lawyer