The end of the HMRC’s most innovative disclosure facility ever!

In September 2009, HMRC introduced a (primarily) offshore tax disclosure facility called the Liechtenstein Disclosure Facility (LDF). This applied to anyone with unreported tax liabilities connected with assets held anywhere outside the UK (not necessarily in Liechtenstein) and gave the opportunity to “come clean” and settle with HMRC on favourable terms. The terms have changed over the years but in most cases they now include:

  • Immunity from prosecution for the tax offence;
  • A fixed 10% penalty for periods from 6 April 1999 to 5 April 2009;
  • A complete amnesty for periods before 6 April 1999;
  • The ability to pay tax at a simplified single composite rate in lieu of actual liabilities (which can be particularly attractive where IHT irregularities are involved).

In a surprise announcement in the recent Budget, it was confirmed that the LDF (and the similar disclosure facilities for the Crown Dependencies of Jersey, Guernsey and Isle of Man) will close on 31 December 2015. It is to be replaced with a “final” disclosure facility which will commence from 1 January 2016 and will run to 2017 to coincide with the automatic exchange of tax information under the Inter-Governmental Agreements (IGAs) in 2016 and the Common Reporting Standard from 2017.

At present only limited details have been released about this new facility; but it is already clear that

  • there will be no immunity from prosecution
  • the minimum level of penalties will be at least 30%.

Furthermore, it is likely that the new facility will lack the “Composite Rate Option”.

With less than 6 months to the end of the LDF, time is running out for anyone still needing to disclose unpaid taxes connected with overseas accounts or structures. Leaving it until after the end of 2015 will be expensive: and waiting for HMRC to come and find you costlier still. For more on the LDF and whether it could work for you, please get in touch with your usual contact partner or use our enquiry form.

The above is abridged from an article in the 25 June 2015 edition of Taxation Magazine, titled The Final Countdown. The full article is available here as a pdf and here on the Taxation website.



Sam Inkersole

In 2022, Sam won the Taxation’s Rising Star award at the Taxation Awards in and was named in the Accountancy Age 35 Under 35.

Jon Wedge

While Jon’s client work focuses on the financial services sector, he also oversees the firm’s assurance service, as well as supporting the trainees following in his footsteps.


Elana joined us in 2017 as an ACA trainee, after graduating from Durham University where she had studied languages. She is now a manager in our assurance team.


By submitting this form, the data provided will be used to perform your request according to our privacy policy.