Disclosure facilities set up to encourage taxpayers with assets in the Crown Dependencies of the Isle of Man, Jersey and Guernsey to declare underpayment of tax have yielded low returns for HMRC, Fiona Fernie has said.
The head of tax investigations at law firm Pinsent Masons said: “It is not particularly difficult to see why – the terms offered are much less favourable than those available under the Liechtenstein disclosure facility, which provides full immunity from prosecution.”
According to figures from HMRC, the Crown Dependency disclosure facilities has collected only £13.9m since it launched in April 2013.
Ms Fernie said that taxpayers with more serious irregularities were more likely to move assets to Liechtenstein, where they have immunity and a single point of contact with HMRC.
The LDF has raised over £1.1bn from 5,633 disclosures as at June 2015.
As long as a full disclosure is made, favourable settlement terms are offered by CDDF; any tax liabilities pre-dating April 1999 are not assessed, and reduced penalties for overdue tax applied thereafter.
Crown Dependency disclosure facilities results, April 2013 to June 2015
| Isle of Man | Jersey | Guernsey |
Registrations | 232 | 232 | 56 |
Disclosures | 186 | 181 | 37 |
Number of settlements | 149 | 131 | 25 |
Yield from settlements | £3.7m | £2.2m | £700,000 |
Payments made in cases not yet settled | £1.9m | £3.5m | £1.9m |
Background
The CDDF was scheduled to close in September 2016 until an announcement in the March Budget brought closure forward to 31 December 2015. The LDF will close on the same date.
