The Liechtenstein Disclosure Facility (LDF) is set to fall well short of the £3bn target that was set by former HM Revenue & Customs Permanent Secretary Dave Hartnett in 2012.

With just 18 months left to run on the facility, a figure of only around £833m – equating to approximately £14.1m per month – has been generated in the five years since its inception, according to law firm Irwin Mitchell.

The LDF enables Britons to obtain a generous settlement with HMRC on any undisclosed tax liabilities held in offshore bank accounts, by rerouting funds through Liechtenstein. The facility was initially due to end to in March 2015, however increased demand for the scheme has seen it extended until 5 April 2016.

HM Revenue & Customs said it has collected more than £1bn. In August 2014, HMRC struck to restrict access to some of the favourable terms offered by the facility. In a letter sent to advisers HMRC said: “The changes being made as a result of this review will make no difference to the vast majority of people who wish to participate in the LDF but will bring a greater degree of fairness to the facility and ensure that it operates as it was originally intended.”

Under the full favourable terms, successful LDF applicants must pay a small fixed penalty of just 10% on the underpaid liabilities for periods to 5 April 2009. In addition, assessment is limited to accounting periods or tax years from 1 April 1999 and there is an option to choose a single rate of 40% rather than calculate actual liability on an annual basis.

Access to the full favourable terms will be available to taxpayers whose offshore liabilities have been disclosed in full to HMRC. Subsequently, taxpayers who are yet to disclose their offshore liabilities will not have access to the full favourable terms and therfore fare a harsher penalty. Cases with no substantial connection between the liabilities being disclosed and the offshore asset held by the taxpayer as of 1 September 2009 will no longer qualify for the scheme.

Commenting on the latest figures, Irwin Mitchell head of contentious tax said: “You can analyse the yield figures in numerous ways, but, at this rate, HMRC are not going to reach its target of raising £3bn through the facility.

“I suspect that the eventual yield will fall woefully short of that target, and, based on figures to date, is likely to be in the region of £1.2bn. Further changes to the scheme are likely to make this figure worse rather than better.”