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LDF users will need a confirmation of relevance certificate

LDF users will need a confirmation of relevance certificate

Contractor accountants may want to advise their clients that if they want to use the Liechtenstein Disclosure Facility to declare unpaid taxes they must provide proof that their connection with the country is meaningful.

HMRC says that as from the first of December, users of the LDF must obtain a “confirmation of relevance “certificate from a financial intermediary prior to registration.

The Liechtenstein Disclosure Facility was launched in 2009 and offered taxpayers the opportunity to rectify their tax affairs in return for lower penalties and a guarantee of immunity from prosecution. At launch HMRC explained that users had to demonstrate a meaningful connection to the country and earlier this year it clarified that 5% of a person’s assets had to be invested in a Liechtenstein company.

The Revenue has also said that LDF registration will not be withdrawn or suspended if the investment changes later. The government hopes to rake in as much as £3 billion from the initiative.

The recently signed Anglo-Swiss tax amnesty does not guarantee immunity from prosecution. Instead the agreement says that a criminal investigation is highly unlikely.

A lot of advisors still maintain that the LDF remains a better option for taxpayers. During the summer, Stephen Camm from PwC explained that taxpayers lose their right to anonymity under the LDF, but it offers a better deal.

Meanwhile, doctors and dentists are being urged to put their tax affairs in order or risk a criminal investigation. HMRC has written to 2,500 medics giving them 21 days to respond or face additional penalties.

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Image: Retro by Guillermо

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