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Less than 20 per cent of accountants inform clients about tax disclosure facilities

Some accountants are concerned about 'causing offence' if they raise awareness of tax disclosure opportunities

7 July 2015

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Only 19 per cent of accountants have informed all of their clients about the favourable Lichtenstein Disclosure Facility (LDF) which closes in less than six months.

A survey carried out by Crowe Clark Whitehill also reveals that almost two-thirds of accountants (63 per cent) either have no knowledge of, or are unaware of the details of the disclosure facilities relating to the Isle of Man and the Channel Islands.

The Chancellor of the Exchequer, George Osborne, announced in the coalition government's last budget on 18 March that all disclosure facilities will close on 31 December 2015, instead of the previous date of 2016.

Tax investigations partner at Crowe Clark Whitehill, John Cassidy, commented: 'It is alarming that now, with all the facilities closing by December 2015, so many accountants still haven't informed their clients about the options, despite their beneficial terms.

'The results here highlight the need for accountants to quickly get to grips with international disclosure facilities, particularly the LDF which, despite existing for more than five years, appears to remain under-utilised.'

The survey paints a picture of a profession which is largely unaware of the disclosure facilities available, and in some cases unwilling to change their approach unless they are prompted to do so.

25 per cent responded that nothing would persuade them to change their approach and inform clients about the facilities, whereas 29 per cent would only change if directed to do so by their professional body.

Interestingly, 31 per cent said that they are likely to change their approach if more information was available, and would like guidance on how to raise awareness themselves, without causing offense.

John Cassidy feels that many accountants are unnecessarily burdening themselves and advises that they seek help where necessarily.

He said: 'If accountants require extra support, they can refer their clients to a specialist advisor. These facilities are proven to work (5,819 disclosures as of 31 March 2015) in encouraging tax disclosures and have the potential to generate much-needed revenue for the UK.

'HMRC and the accountancy profession need to work together to improve understanding, both within the profession and to clients and the public.'

Another worrying statistic is that more than half (57 per cent) of accountants are either unaware of, or have no knowledge of the reporting obligations on UK residents under 'UK FATCA'.

Meanwhile an overwhelming 99 per cent of accountants surveyed said they would like to see a general domestic disclosure mechanism, which would cover both domestic and offshore assets.

 

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Tax & Wealth structuring