HMRC announces extension to "amnesty" deadline

HMRC has announced an extension to the deadline for notifying under the New Disclosure Opportunity (NDO).

Earlier today, HMRC announced that the registration deadline for the NDO has been moved from 30 November 2009 to 4 January 2010. When making the announcement, Dave Hartnett, HMRC's Permanent Secretary for Tax, said:

"We know that some bank customers will not be contacted by their banks in good time for the original deadline of 30 November so in the interests of fairness we have decided to extend our deadline by a month to 4 January."

That's an incredible statement to make. HMRC knew weeks, if not months, ago that banks would not be in a position to contact their customers (most of the information notices are under appeal). Advisers will be aware from our previous e-bulletin that HMRC had been unwilling to release details about take-up to the NDO when we submitted requests under the Freedom of Information Act.

Advisers will also be aware that HMRC has, only recently, started writing to certain taxpayers in relation to the NDO. More details are emerging, and it appears that they have not been targeting the right people. The reason the Offshore Disclosure Facility (ODF) was a relative success in 2007 was because, in addition to the banks writing to account-holders, HMRC also wrote to them. It is unclear whether HMRC will be writing to more taxpayers in relation to the NDO. If they do, it is unlikely to be on a substantive scale.

Disclosure date unchanged

This is a further damage to the credibility of HMRC. Further, the deadline for submitting a disclosure under the process is not being extended. Those taxpayers registering shortly before the revised deadline will have around ten weeks to prepare calculations covering up to 20 years of unassessed tax. Or, more likely, their advisers will have only ten weeks to make the necessary calculations (never mind collating the information in the first place!) at their busiest time of the year!

The Liechtenstein opportunity

The deadline extension is good news, in that it gives taxpayers more time to come forward. The extension gives advisers further time to consider whether the Liechtenstein Disclosure Facility (LDF) is available to their clients. The LDF offers considerable advantages over the NDO, not least immunity from prosecution and a restriction on the disclosure to the period from April 1999 (under the NDO, the disclosure period is 20 years, and unrestricted for IHT liabilities).

To qualify for the LDF, taxpayers must have an account, investment or structure in Liechtenstein. Those without such an interest can use the LDF by now acquiring an account, etc in that country, providing their existing offshore account was opened in the relevant jurisdiction and not through a UK branch or agency. For more information on whether your clients may be able to use the LDF please contact us. We can also arrange an introduction to a Liechtenstein bank (including those without minimum account-opening requirements) if your client wishes to open an account there.

How can McGrigors help you and your clients?

McGrigors has a multi-disciplinary team of experienced investigators who can assist you with the NDO and LDF processes. The LDF offers very favourable terms, and we can consider whether your clients are able to use that process, even if they don't currently have an investment in Liechtenstein.

We can deal with your queries, and guide you through any options available, and assess the best one for your clients.

For an initial free and confidential discussion, please contact Phil Berwick, Director, Tax Disputes and Investigations, on +44 (0)20 7054 2548 or email him at phil.berwick@mcgrigors.com.