HMRC has published the following four consultation documents, with a deadline of 8 October 2015, to tackle offshore tax evasion (see www.bit.ly/1HwoUwE):
These consultations take forward HMRC’s strategy for tackling offshore evasion, published in No safe havens. An update on this strategy was published in April 2014. However, the CIOT has criticised the intention of introducing a new ‘strict liability’ offence for offshore tax evasion. Patrick Stevens, CIOT tax policy director, said: ‘Any new measures should be based on sound legal principles. One of these is that in order to make a criminal conviction it should generally be required to show that the act was committed with criminal intent unless there is potential for an immediate threat to public safety. The proposed strict liability offence for failing to declare overseas income and gains fails this test. A taxpayer may fall within the ambit of the offence without any intention or knowledge on their part.
‘The government’s announcement that there will be a de minimis threshold of £5,000 of under-declared tax before the new offence can apply is welcome. This is something we argued for during consultation. It will at least ensure that those making errors over relatively small amounts of tax will not get caught by this new offence. The announcement that there will be “reasonable excuse” and “reasonable care” defences is also welcome. However, these defences and thresholds do nothing to change the fact that someone who has no intention to evade tax could still be liable to criminal sanctions, and we think this is wrong.’
On the proposals to introduce a new offence of corporate failure to prevent tax evasion or the facilitation of tax evasion and new civil penalties for those who facilitate evasion, Stevens added that ‘there is already plenty of law in this area’, particularly around anti-money laundering rules and liability to a criminal offence under the Proceeds of Crime Act 2002.
HMRC has published the following four consultation documents, with a deadline of 8 October 2015, to tackle offshore tax evasion (see www.bit.ly/1HwoUwE):
These consultations take forward HMRC’s strategy for tackling offshore evasion, published in No safe havens. An update on this strategy was published in April 2014. However, the CIOT has criticised the intention of introducing a new ‘strict liability’ offence for offshore tax evasion. Patrick Stevens, CIOT tax policy director, said: ‘Any new measures should be based on sound legal principles. One of these is that in order to make a criminal conviction it should generally be required to show that the act was committed with criminal intent unless there is potential for an immediate threat to public safety. The proposed strict liability offence for failing to declare overseas income and gains fails this test. A taxpayer may fall within the ambit of the offence without any intention or knowledge on their part.
‘The government’s announcement that there will be a de minimis threshold of £5,000 of under-declared tax before the new offence can apply is welcome. This is something we argued for during consultation. It will at least ensure that those making errors over relatively small amounts of tax will not get caught by this new offence. The announcement that there will be “reasonable excuse” and “reasonable care” defences is also welcome. However, these defences and thresholds do nothing to change the fact that someone who has no intention to evade tax could still be liable to criminal sanctions, and we think this is wrong.’
On the proposals to introduce a new offence of corporate failure to prevent tax evasion or the facilitation of tax evasion and new civil penalties for those who facilitate evasion, Stevens added that ‘there is already plenty of law in this area’, particularly around anti-money laundering rules and liability to a criminal offence under the Proceeds of Crime Act 2002.