HMRC have fought back at claims that the Liechtenstein Disclose Facility has been a failure.

Between the first of September last year and the end of March 2010, only 419 taxpayers signed up for the LDF. The New Disclosure Opportunity, on the other hand, was taken up by 10,000 taxpayers, according to McGrigors.

The LDF has more favourable terms than the NDO. Taxpayers only need to own up to undeclared offshore tax liabilities going back 10 years as opposed to the 20 year requirement for the NDO.

The tax and law firm said that this was another example of the poor responses to disclosure initiatives from HMRC. The firm pointed out that another tax amnesty for medical professionals has been taken up by only about 1,500 of the 30,000 who are thought to have undisclosed tax liabilities.

McGrigors believe the take up rate for these disclosures is hampered by a lack of advertising or promotion by the Revenue. They say that professional advisers are given the responsibility of spreading the word rather than the taxman taking the initiative.

The Revenue says it is very pleased with the amount of individuals who have voluntarily registered for the LDF so far. The number is increasing steadily, and unlike other short term disclosures, the LDF is available until 2015.

The LDF legislation doesn’t come into effect in the principality until the first of September, so it’s ridiculous to start drawing conclusions already. LDF is going really well and its “balderdash” to suggest differently, an HMRC spokesperson said.

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We are aware of HMRC plans to offer medical professionals a disclosure opportunity in respect of unpaid taxes. The Tax Health Plan will allow medical professionals the chance to disclose any arrears and settle them with interest and a ten per cent penalty.

Those who fail to make a disclosure who are subsequently investigated by HMRC and found to owe taxes could then face a one hundred per cent penalty.

HMRC have accessed information regarding the earnings of medical professionals from the NHS, medical health insurance companies, private hospitals and certain contractor accountants. Prior to acting on the information they hold, HMRC are offering medical professionals the opportunity to confirm their intention to disclose their earnings by 31st March 2010. They will then have until 30th June 2010 to make their full disclosure.

Mike Well from HMRC has suggested that the government already has an abundance of information at it’s disposal that could be used to investigate medical professionals. He said “I strongly urge any in this group who think they may have outstanding tax liabilities on their income to get in touch with HMRC and get their tax affairs in order simply and on the best available terms.”

This disclosure opportunity is likely to be extended across other sectors in the future. Contractors using umbrella companies , such as Crystal Umbrella, are unaffected since their taxes are deducted fully through PAYE. It is expected that the umbrella model and online accountants will become increasingly more popular with medical professionals who are keen to minimise their taxes without the hassle of extra administration.

Scott Illingworth is Director of Service Delivery at Crystal Umbrella.
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