Are HMRCs proposals to tackle offshore tax evasion seriously flawed?

/ Posted By - Bradleys Accountants / Categories - Accounting news

Tackling offshore tax evasion was a popular mantra during the 2015 UK election. Encouraged by its success the government announced four consultations as part of its strategy to give UK a global leap forward in terms of tax transparency. The government proposed to introduce tough new sanctions and strict liability criminal offence for those who don’t declare taxable offshore income. However the proposals have come under fire from managing partner of Kingsley Napley LLP: David Sleigh. In the law firm’s official response, David criticized the government’s plans to introduce a strict liability offence for individuals who evade tax as “unclear, unworkable and ultimately unjust”.

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    He said: "The problem with what is proposed is that someone could be found guilty of committing tax fraud following a genuine mistake."

    Commenting about the consultations, the law firm argued that HMRC was well aware about the “inherent unfairness of a strict liability offence”, and had therefore proposed a number of defences including “reasonable excuse” and “reasonable care” for not providing accurate information regarding offshore income or assets. According to David, these defences are not defined properly.

    He said: “No examples have been given of the kind of behaviour which would be caught by the proposals that are not already covered by offences under current tax evasion provisions. The proposed legislation is complex, confusing and is likely to create more litigation than it resolves. The lack of clarity rather defeats the purpose of the proposed legislation which was apparently designed to be simpler to administer.”

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