£3bn expected to be raised following the Liechenstein Disclosure Facility

When the Liechtenstein Disclosure Facility was signed three years, HM Revenue and Customs expected to raise £1 billion. Now it is expected to raise nearly £3 billion by the year 2016. This is due to a much larger number of people coming forward to declare unpaid tax than was anticipated. Already £363 million has been paid by UK citizens who have money hidden in Liechtenstein.

So far nearly 2,500 people have come forward and registered with HMRC and it is believed that this figure could double to 5,000. The LDF allows people who have money hidden in secret accounts in the tax haven, to come forward and declare their investments and sort out their tax owed with the taxman.

If they do come forward they will still face penalties but it will only amount to ten percent of the tax that they have evaded. This will go back over ten years and there will be interest to pay. Those people that don’t come forward and declare their investments will face much stiffer penalties. They will have to pay 200 percent of their evaded tax and could also face being prosecuted.

The LDF was originally only going to run until March 2015 but the period has been extended until April 2016. The permanent secretary for tax at HMRC, David Hartnett, said that it had been a great success with the much larger amount of people coming forward. There is also a double-taxation agreement between the UK and Liechtenstein to make sure that people are not taxed twice.