News For the Latest News please click here . To contact us please click here . News Archive..... Tax Investigations Disclosures - Is Liechtenstein The Way To Go? The Liechtenstein Disclosure Facility (LDF) The LDF has been with us for some time now and runs until 2015. It is assumed by many to apply only to the very wealthy but does this represent an efficient opportunity to deal with tax irregularities for everyone?
What is it? The LDF provides taxpayers with a Liechtenstein interest with an opportunity to disclose any tax irregularities under favourable terms; including a restriction on the time periods covered, composite rate arrangements and, in most cases, very favourable terms for penalties.
I don't have a Liechtenstein presence so what's the point? Under the terms of the LDF it may be possible to consolidate one's affairs to incorporate a Liechtenstein interest or presence. Properly constructed anyone with tax issues to declare to H M Revenue & Customs will then be able to make a managed disclosure to the tax authorities under very favourable terms. The potential to save significant sums may extend to moderate tax issues and so is not just the preserve of the fabulously wealthy.
HMRC's offshore initiatives With HMRC being given a fund of some £900 Million to attack offshore tax plans, evasion and to increase the number of prosecutions for tax offences considerably now is the time for anyone with substantial tax issues to address to do something about it; rather than wait and take the chance that they will not be the unfortunate behind bars.
The environment in tax investigations can only get tougher and HMRC's ability to detect and deal with tax problems will only get better. They are already targeting Swiss Bank account holders, the general offshore disclosure initiative (New Disclosure Opportunity) has only recently been closed but with a new offshore specialist team being set up in HMRC the pressure will mount. We now have the Isle of Man Disclosure Facility with other 'tax havens' due to follow suit in signing tax information exchange agreements with the UK. Now is the time to act.
Help and Advice Anyone with concerns regarding their tax position or with matters to disclose should seek appropriate advice as soon as possible.
For a non committal and completely confidential discussion please get in touch with Gary Rooney via our usual contact details.
Prudential And Accountants Lose LPP Battle Prudential Lose Appeal on LPP The court of appeal dismissed hopes of accountants being granted legal privilege for their tax advice in a decision handed down on Wednesday. Rejecting arguments put forward on behalf of the company and accountants Price Waterhouse Coopers as well as the ICAEW, Lord Justice Lloyd decided that the scope of legal professional privilege (LPP) was something for Parliament to decide rather than the courts
What's it all about? The concept of LPP has been around for centuries and permits lawyers to openly discuss matters of law with their clients with no fear that these privileged discussions will be disclosed to the authorities.
Within the concept of giving tax advice the protection of LPP still applies to the soliciting and giving of advice by lawyers on the application of tax law. It does not extend to the giving of tax advice by accountants and that was the issue being considered by the Court of Appeal.
The accountancy body, the ICAEW, believe that the protection afforded by LPP should be extended to accountants who give tax advice to level the playing field between the two professions.
The Court of Appeal confirmed that LPP is only applicable to lawyers, solicitors, barristers and appropriately qualified foreign lawyer.
Implication for tax investigations Under certain information powers available to H M Revenue & Customs (HMRC) there are restrictions in what HMRC may reasonably or lawfully request.
Under s36 of Finance Act 2008 (formerly s20 Taxes Management Act 1970) the restrictions on what documentation HMRC may require include specific references to documentation covered by LLP. That means documentation between a tax adviser and his client will not be subject to LLP and so, unless specifically restricted elsewhere, should be disclosed.
Within the taxes acts there are restrictions on what may be required by HMRC in formal information notices. There are also significant penalties for failure to comply with a formal information notice.
Further information In any tax investigation there is a balance to be struck between protecting the rights of the client against the lawful obligations imposed by the taxes acts and the lawful (and reasonable) requests from officers of HMRC.
With any investigation notice the documentation and information requested needs to carefully considered and any suggestion that something cannot or should not be supplied needs to be made after careful consideration so as to avoid penalties for failure to comply with a notice and allegations of a lack of co-operation.
For advice on formal notices or in any tax investigation please do not hesitate to contact us.
Government Invest £900Million in HMRC But Expect £7Billion in Return Government expect a 'return' on their investment The Government's plan to cut budgets in this time of austerity is coupled with a renewed fight against tax dodging.
The chief secretary to the Treasury, Danny Alexander, recently announced that extra resources are to be made available for tackling tax avoidance, evasion and fraud. £900 million will be put aside over the spending review period to fund measures.
So what does that really mean? a fivefold increase in the number of criminal prosecutions for tax evasion; a crackdown on offshore evasion, with the creation of a dedicated team of investigators to investigate those hiding money offshore; a tougher stance on evasion and avoidance by those liable for the 50% tax band; further investment in in-house collection capacity to increase HMRC's internal debt collection rates and to outsorce debts to private debt collection companies. more registration checks to stop people claiming tax repayments when they are not due. The Government has already announced steps to tackle non-compliance at the June Budget, including using debt collection agencies to collect £140million of additional revenue during the current financial year. This package builds on this. HMRC will begin implementing these proposals immediately, in order to ensure that they deliver this package of measures over the four year period covered by the spending review.
HMRC have confirmed that the fund of £900million is to be spent over the four year period covered by the Spending Review, i.e. April 2011 to April 2015. Evasion is estimated to cost the Exchequer approximately £7billion each year in uncollected tax revenues. Avoidance costs around the same figure. Attacks on the tax system by organised criminals are estimated to cost around £5billion. Many experts suggest that the losses are even greater
Implications for taxpayers In recent years additional information and penalty powers have been given to HMRC. This new drive to combat tax losses to overseas schemes, higher rate taxpayers and those suspected of serious fraud will impact on anyone caught up in HMRC's sights.
Larger businesses and especially successful family owned businesses will face closer scrutiny and anyone with a tax 'issue' to resolve would be well served to consider making appropriate disclosures now.
Advantages of voluntary disclosures HMRC are now actively looking to increase the number of prosecutions for tax offences five fold. Provided you are not already in the sights of the prosecution teams a voluntary disclosure of any tax issues will usually secure protection from prosecution. There are further advantages in the ability to manage the process of disclosure and secure favourable treatment; especially as regards penalties. Some may choose to wait for the knock on the door, at which point, all of those advantages will be lost.
If you need help or advice If you have any tax issue that is concerning you please get in touch with us for a no obligation and confidential discussion.
HMRC Target Swiss Bank Account Holders HMRC Target Taxpayers With Swiss Bank Accounts H M Revenue & Customs has acquired details of hundreds of UK residents who have bank accounts in Switzerland and are now approaching them to investigate their tax affairs here in the UK.
Actions by HMRC In a similar fashion to previous projects involving UK residents with offshore bank accounts HMRC have acquired details of Swiss accounts held by UK residents. It is believed that the accounts are held by high net worth individuals in the Swiss division of HSBC.
Although famous for its secrecy laws it seems that an employee of the bank stole the data and this was passed to the French authorities who then passed on the relevant information to HMRC in the UK.
Now armed with this information HMRC have contacted those implicated in the data to commence a detailed investigation of their tax affairs here in the UK. It is understood that many are being dealt with under HMRC's Code of Practice 9 that deals with cases of suspected fraud.
This follows a similar episode in Germany where the German authorities purchased similar data that was stolen from a wealth management firm. There was also a call to clamp down on 'offshore' tax havens by the G20 last year. HMRC have vowed to do just that and recently suggested that "the days of hiding money offshore are over".
What does it mean to those affected? For those caught up in HMRC's initiative there is great risk. Any investigation is serious but one under HMRC's COP9 carries a real threat of prosecution if you do not co-operate with the investigation and make a full and complete disclosure of all relevant facts.
Disclosures of this type require specialist input and those affected should seek advice straight away. Properly handled this is a matter than can be dealt with quickly and efficiently whilst minimising any risk of prosecution or being overcharged by HMRC.
Of course the opposite is also true if the matter is not handled properly.
If you need help and advice If you believe you may be caught up in this initiative, or indeed any other 'dispute', with HMRC you should seek expert assistance as soon as possible.
Please feel free to contact us on 01283 761 777 for a no obligation, confidential discussion.
Tax Issues in the West Midlands No Tea Party for HMRC? It has recently been reported that members of the USA Tea Party are advising British anti-tax campaigners on "mass protest techniques". This adds yet more fury to the fall out from the latest revelation that 1.4 million taxpayers have had incorrect coding notices and so are facing demands for underpaid tax.
Max Hastings of the Daily Mail has suggested that many of us "fear the taxman more than the Taliban", which, although a clear exaggeration does indeed capture the general feeling that most of us do fear the taxman to one extent or another.
HMRC are under tremendous pressure and there are signs that the department is not coping in many areas with unanswered calls and post at a very high level. Against a backdrop of budget cuts and demands for HMRC to recover as much of the "tax gap" as possible as soon as possible it begs the question, "Can HMRC cope?"
"Rooney Tax Services" is the trading name of RTS Investigations Ltd a company registered in England & Wales. Company number 07434036, Registered Office Chapel House, Burton Road, Coton in the Elms, Derbyshire, DE12 8HJ".