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HMRC is watching contractor tax evasion

23 June, 2011

Many thousands of UK umbrella company contractors who have undeclared earnings in offshore savings accounts should be aware that the HMRC is on a quest to uncover them. The HMRC has upped its efforts to uncover international tax evasions; it believes that recovering unpaid taxes from offshore accounts is one of the best ways to bring in more money.

Reports say that the HMRC has the personal details of approximately half a million people under suspicion and those holding secret bank accounts in Liechtenstein have until the 31st of March 2015 to take advantage of the disclosure facility.

Under the Liechtenstein Disclosure Facility (LDF), those making a disclosure will pay full interest plus a 10% fixed penalty on all underpaid liabilities. However, if the error is deemed to be innocent, the taxpayer will not be charged a penalty.

To date, 475 people have used the LDF to make disclosures as at the end of March this year; this raised £140 million for the Revenue.

The HMRC’s original target was to bring in £1 billion from 5,000 disclosures; however the figure has been revised to nearly £3 billion due to the initial success of the scheme.

A tax investigations partner from PKF, John Cassidy, said that the uncertainty surrounding a similar disclosure deal with Switzerland has meant that the Liechtenstein banks have not yet started their investigations. 

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