LONDON | More than 2,400 people have registered to disclose unpaid tax under the Liechtenstein disclosure facility with £363 million already paid in tax bills, the British tax authorities announced Monday. The new legal framework is now expected to bring in up to £3 billion by 2016 based on the current numbers of disclosures.
The figures were released as the United Kingdom and the Principality of Liechtenstein prepared to sign a double taxation agreement today. The accord will remove obstacles to investment and other cross-border economic activity and will give businesses increased certainty about their tax treatment, HM Revenue and Customs said. It will be the first between the two countries and will be signed in London by Dr Klaus Tschütscher, prime minister of Liechtenstein, and David Gauke, Exchequer secretary to the Treasury.
Gauke said that the British government is determined to clamp down on tax avoidance at home and abroad.
“The UK has the largest tax treaty network in the world but, until now, Liechte
nstein was the only country in the European Economic Area we had no agreement with. This new treaty and the existing disclosure facility show that the net is closing on those who try to evade their UK tax liabilities by using offshore structures – there are fewer and fewer places to hide.”
The UK and the Principality of Liechtenstein will sign a third joint declaration on cooperation in tax matters. It will make available a single charge rate of 50 percent that Liechtenstein investors might apply to calculate undisclosed UK tax liabilities for the tax year 2010/11.
The Liechtenstein disclosure facility was signed in August 2009 and was originally scheduled to run from 1 September 2009 to 31 March 2015. It has since been extended to 5 April 2016. According to the British Treasury, the yield of £363 million is made up of £296 million generated from settled cases and £67 million paid in cases not yet settled.
The agreement allows investors in Liechtenstein who are liable to UK tax to legitimise their tax affairs for the past and ensure they are tax-compliant for the future. It is underpinned by a tax information exchange agreement, signed in August 2009, and by special legislation in Liechtenstein.