Grace Extended for Confessing to HMRC

1937: True Confession -  Ruggles

Financial Planners are duty bound to help clients make wise decisions when it comes to how money is handled. We are also duty bound to report any fraud or tax evasion to the relevant authorities, which is not something that I have ever had to do to date. HMRC are in a precarious position at the moment, on the one hand they need to raise money (tax) properly so that our ailing economy can still pay its way and so must appear tough on those that pay late or evade their taxes. At the same time, this is set against initiatives to encourage honest reporting of income with sweeteners to help the decision to "come clean" rather easier. Hence the decision today to extend the LDF Leichtenstein Disclosure Facility. The LDF is such a sweetener that enables taxpayers to declare previously undeclared or unremitted income and associated tax. The sweetener is that the penalties are reduced dramatically by 80%. To date over 2000 people have taken the opportunity to confess all and this tactic has worked rather better than probably HMRC imagined. As a result the sweetener has today been extended by a further year until 5th April 2016. This follows double taxation agreements with Liechtenstein. There is a real sense that HMRC will now be able to accurately trace such funds and therefore common sense would suggest, coming clean is the least punitive option.

This has nothing to do with the Spurs Manager, Harry Redknapp case, which came to an end today. This is an entirely different matter where Mr Redknapp didn't pretend that money had not changed hands, but the purpose behind the transaction was rather vital for taxation purposes - was it connected to employment or not? which has taxation implications. Mr Redknapp won his case today. Given Mr Redknapp's profile, it is surprising that this went to a Criminal Court rather than a taxation tribunal, but presumably HMRC were attempting to convey a message to the wider population.

If you are in any doubt about tax matters, I can put you in touch with a variety of Accountancy firms with relevant expertise. Most importantly please understand that tax evasion is illegal and can carry a custodial sentence.