New measures to tackle offshore tax evasion criticised
The government has come under fire from The Chartered Institute of Taxation (CIOT) over their decision to continue with their planned strategies designed to prevent offshore tax evasion. The idea of introducing a ‘strict liability’ offence to act as a deterrent for those who might be inclined to reduce their tax bills using illegitimate means.
While the CIOT has expressed a general level of support for measures which might reduce the incidence of tax evasion, they have concerns over the introduction of a criminal offence which will have no requirement to prove any intention on behalf of the perpetrator. They believe that the introduction of new measures should be done on the grounds of sound legal principles which would require there to be some proof of criminal intent when it comes to the commission of the crime in question.
They are concerned that the proposed ‘strict liability’ test which requires the declaration of overseas income falls down when it comes to this requirement, as someone could be found guilty of the offence without any intention or even knowledge of the evasion in question. Patrick Stevens, of the CIOT, has expressed concern that this new legislation could mean that someone could be convicted of, and imprisoned for, an offence for which guilt might not have been proved beyond reasonable doubt.
The CIOT are keen to keep lines of communication open with HMRC in order to refine the legislation and work through the details to ensure that adequate threshold and defences can be put in place to minimise the risk of people being criminalised inappropriately. However, these measures will not be able to prevent a situation occurring where a person who has no intention to evade tax could be prosecuted and face criminal sanctions.
There has been another announcement by the government of their intention to consult with experts and advisers on their plan to introduce further laws which would make it a criminal offence for corporate bodies to fail to prevent tax evasion or to actively facilitate evasion. There will be yet another consultation which will be looking the imposition of civil penalties for those that enable tax evasion on the part of others and public naming of those found guilty.
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