UK and International Tax news
New Penalties For Enablers Of Offshore Tax Evasion
Monday 9th January 2017
As originally announced in the 2015 Budget with provisions included in FA2016, HMRC has confirmed that as from 1 January 2017 accountants, bankers, lawyers and other advisors who enable offshore tax evasion will face tough new sanctions including penalties.
New powers will see individuals or corporates who take deliberate action to help others evade paying tax facing fines of up to 100% of the tax they helped evade or £3000, whichever is highest. In addition, HMRC will also be able to publicly name the enabler.
While tax evasion has always been illegal, this new law will mean HMRC can, for the first time, charge civil penalties on the facilitators of the tax evasion who provide planning, advice or other professional services or physically move funds offshore.
This year will also see the government introduce a new corporate criminal offence of failing to prevent the facilitation of tax evasion. Under the new rule currently being legislated for, companies will be held liable if an individual acting on its behalf as an employee or contractor facilitates tax evasion. Previously there needed to be proof that the board of directors was aware and involved in facilitating the evasion.
This is alongside introducing a new requirement to correct past tax evasion, which will see anyone who has failed to correct past evaded taxes by 30 September 2018 hit with tough new penalties, and consulting on a new requirement for businesses and individuals who create complex offshore financial arrangements that bear the hallmarks of enabling tax evasion to notify them to HMRC.
Since 2010 HMRC has secured over £130 billion in additional compliance revenues as a result of actions to tackle tax evasion, tax avoidance, and non-compliance. It has also secured more than £2.5 billion specifically from offshore tax evaders.
If you would like further information on the above, please contact Keith Rushen on 0207 486 2378.
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