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The revenue from HMRC’s Liechtenstein disclosure facility (LDF) is likely to fall significantly short of its £3bn target, according to solicitors Irwin Mitchell.
The expected yield was £1bn at the initiative’s launch in September 2009, but the Revenue tripled the forecast after raising £140m in the first 19 months.
The revenue from HMRC’s Liechtenstein disclosure facility (LDF) is likely to fall significantly short of its £3bn target, according to solicitors Irwin Mitchell.
The expected yield was £1bn at the initiative’s launch in September 2009, but the Revenue tripled the forecast after raising £140m in the first 19 months.
The LDF has seen a monthly average of 102 registrations in its lifetime, although the figure was just 94 over the 12 months to February this year.
Irwin Mitchell predicted a final total of £1.4bn when the facility – aimed at encouraging UK residents with investments in the alpine principality of Liechtenstein to clear their tax arrears without risk of criminal investigation – closes to new cases on 5 April 2016.
The amount could be lower if the fall-off in registrations continues, the firm added.
The LDF “offers a pragmatic approach to resolving tax issues,” said head of contentious tax Phil Berwick, but he warned of a “significant over-estimating of the likely yield”.
He likened the situation to that of the UK-Swiss agreement, which generated only £800m of its £3.2bn target.
Barker Tilly tax partner George Bull suggested in November 2010, 14 months into the LDF’s existence, that the disclosure campaign would raise around £500m over its lifetime.
