International Tax Investigations

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A rise in international tax investigations is evident. The Liechtenstein Disclosure Facility – a legal UK tax loophole, may still be the best option. Former Inland Revenue tax investigation senior official discusses a recent case study.


It used to be that tax investigations were generally limited to governments investigating their own citizens resident within the country at the time at which the tax was owed.
However, that’s no longer the case.

Recently, Bob Evans, a UK tax investigation specialist was contacted by a client who was living in the UK but being pursued by the German Revenue. It seems as if International Tax investigations are here to stay – and are becoming increasingly common and increasingly far reaching.

Bob’s Case example: UK resident being pursued by German tax authorities.

In this case, the client was a UK resident who had been temporarily employed in Germany. She had been recruited by an agency based in the Isle of Mann for the German position.

At the end of the contract, she simply left Germany and went to the U.K.

She had not remitted any taxes to the German Revenue as she had supposed that being ‘internationally’ resident, she would not be taxed by Germany as she was not technically resident in Germany.

Some time later she was shocked to receive an email from the German Revenue asking her to co-operate with them during their investigation of her tax affairs.

She approached us for assistance.

From our perspective, as UK tax investigation specialists who work primarily with people who are facing the possibility of a UK tax investigation and the resultant penalties and sometimes even prosecution – this added an extra dimension to our services.

Fortunately, we had already anticipated that the day would arrive when we would be facing an increasing number of international tax investigations. We had already added the necessary capacity and skills to our services that enabled us to assist in this new request.

We were able to provide her with a reputable and experienced tax investigation specialist who knows how to handle the various international revenue departments we’re now dealing with, and also make sure that the client becomes tax compliant in the future.

What should you do if you’re facing an international tax investigation?

The first thing you need to do is to not panic. Panic causes irrational thinking which leads to irrational and risky actions – and you could land yourself in more trouble.

Instead, before you respond to the Revenue’s requests or engage in conversation with them, recruit an experienced, sympathetic and skilled tax investigation specialist to represent you. If necessary, if you feel you might be facing prosecution, you may wish to meet with the tax specialist at a lawyer’s office in the lawyer’s presence. This will provide you with some protection under lawyer-client confidentiality auspices and allow you to confide in the tax investigations specialist without fear that they will be forced to report you.

They can then assess your situation and advise you about the best approaches. In addition, if they already have contacts within the particular Revenue department pursuing you, they will understand how best to handle the communications between you and that department with the least amount of aggression and stress. They will also be able to assess whether you might qualify for the Liechtenstein Disclosure Facility and possibly avoid most of the penalties you might otherwise incur.

If you believe you’re at risk of tax investigation, especially for undeclared offshore assets, Evans has considerable experience in this area and is currently assisting clients to take advantage of a little known legal, UK approved tax ‘loophole’ known as the Liechtenstein Disclosure Facility or LDF. He advises anyone interested to take advantage of the education offered by the free articles and videos on UK Tax Investigation site.


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