HMRC is tightening up the disclosure procedures for individuals who settle their affairs through the Liechtenstein Disclosure Facility (LDF) and will no longer accept submissions if these are missing information.

In a letter to tax advisers, HMRC says the 'more robust stance' will come into effect from 1 April. After this date, LDF disclosures which do not contain all the required information will be rejected and if the missing information is not supplied within a reasonable period of time 'this will be interpreted as non-cooperation and consideration may be given to withdrawal of the beneficial LDF terms'.

HMRC's letter also states that individuals who do not have the means to pay the outstanding tax should raise this as soon as possible and, as part of the disclosure process, should provide evidence of their inability to pay and set out the proposed terms for repayment.

Phil Berwick, a tax investigations expert with Pinsent Masons, said: 'Taxpayers using the LDF need to make sure that all relevant documents have been prepared by their adviser. Ultimately, it is the taxpayer who will suffer if the terms of the LDF are withdrawn. This could mean, at least, higher penalties, or, in certain cases, criminal investigation by HMRC.'

There have been more than 4,000 registrations for the LDF since the scheme was announced in 2009, and HMRC expects to recover up to £3bn of tax through this option.

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