Professional bodies have expressed further concerns on future law around offshore tax evasion. The CIOT called on the government to confirm whether it still intends to go ahead with plans to introduce a new corporate criminal offence of failure to prevent the facilitation of evasion. Meanwhile, the Association of Accounting Technicians (AAT) re-affirmed the need for HMRC to protect individuals, while ensuring that tax evasion is still minimised.
The appeals came after a statement by Justice Minister Andrew Selous that proposals to create a new offence of ‘failure to prevent economic crime’ would not be taken forward. There is, Selous said, ‘little evidence of corporate economic wrongdoing going unpunished’. Both the proposed offence of ‘failure to prevent economic crime’ and the proposed corporate criminal evasion offence had considered the difficulties in holding corporations to account for the actions of individuals working in or for the organisation.
Jon Preshaw, chairman of the CIOT’s Management of Taxes Sub-Committee, said: ‘If the government believes that criminal sanctions need to be strengthened in this area, then the new offence must not only be phased in gradually to allow businesses time to familiarise themselves with the regime, but it must also be subject to appropriate defences being available. The government really needs to provide more clarity around who is affected and what they need to do to comply, if it wants to achieve its objectives. We suggest that a threshold size with different obligations for different sized organisations would help make the compliance burden more manageable for smaller entities. We also suggest that HMRC consults further on a definition of “agent” to make the proposals workable in practice.
‘We are very concerned that the definition of “enabler” in HMRC’s proposal for civil sanctions for enablers of offshore evasion has been framed to include those who “unknowingly” provide services which assist tax evasion. In our view, it is inappropriate to impose criminal sanctions on someone who was not aware that they were facilitating offshore evasion. It should be a requirement for HMRC to prove dishonesty on the part of the enabler.’
Adam Harper, AAT director of professional development, said: ‘Tackling those who intentionally commit offshore tax evasion is a correct move, with a large amount of public backing, but HMRC needs to ensure that a measured approach is taken for those who may have made an honest mistake to be able to declare it and rectify any errors.’
Professional bodies have expressed further concerns on future law around offshore tax evasion. The CIOT called on the government to confirm whether it still intends to go ahead with plans to introduce a new corporate criminal offence of failure to prevent the facilitation of evasion. Meanwhile, the Association of Accounting Technicians (AAT) re-affirmed the need for HMRC to protect individuals, while ensuring that tax evasion is still minimised.
The appeals came after a statement by Justice Minister Andrew Selous that proposals to create a new offence of ‘failure to prevent economic crime’ would not be taken forward. There is, Selous said, ‘little evidence of corporate economic wrongdoing going unpunished’. Both the proposed offence of ‘failure to prevent economic crime’ and the proposed corporate criminal evasion offence had considered the difficulties in holding corporations to account for the actions of individuals working in or for the organisation.
Jon Preshaw, chairman of the CIOT’s Management of Taxes Sub-Committee, said: ‘If the government believes that criminal sanctions need to be strengthened in this area, then the new offence must not only be phased in gradually to allow businesses time to familiarise themselves with the regime, but it must also be subject to appropriate defences being available. The government really needs to provide more clarity around who is affected and what they need to do to comply, if it wants to achieve its objectives. We suggest that a threshold size with different obligations for different sized organisations would help make the compliance burden more manageable for smaller entities. We also suggest that HMRC consults further on a definition of “agent” to make the proposals workable in practice.
‘We are very concerned that the definition of “enabler” in HMRC’s proposal for civil sanctions for enablers of offshore evasion has been framed to include those who “unknowingly” provide services which assist tax evasion. In our view, it is inappropriate to impose criminal sanctions on someone who was not aware that they were facilitating offshore evasion. It should be a requirement for HMRC to prove dishonesty on the part of the enabler.’
Adam Harper, AAT director of professional development, said: ‘Tackling those who intentionally commit offshore tax evasion is a correct move, with a large amount of public backing, but HMRC needs to ensure that a measured approach is taken for those who may have made an honest mistake to be able to declare it and rectify any errors.’
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