NEW LEGISLATION FOR OFFSHORE TAX EVADERS

Written 20th August 2014 by Olliers Solicitors

Individuals who fail to declare offshore tax liabilities could face prosecution under suggested new legislation published for consultation this week.

HMRC is seeking views on a new strict liability criminal offence of failing to declare taxable offshore income and gains. A strict liability offence is a criminal offence where it is not necessary for the court to ascertain the state of mind of the defendant before convicting. This means that the prosecution would need only demonstrate that a person failed to correctly declare the income or gains, and not that they did so with the intention of defrauding the Exchequer.

Current Offences

At present prosecutions for direct tax non-compliance are usually brought under:

  • the common law offence of cheating the public revenue or conspiring to cheat the public revenue;
  • the Fraud Act 2006, which introduced criminal offences of fraud by representation and fraud by failing to disclose;
  • section 106A of the Taxes Management Act 1970 (TMA), which introduced an offence of fraudulent evasion of income tax;
  • anti-money laundering legislation.

In these current offences, in order to obtain a criminal sanction for tax non-compliance, the state of mind of the defendant must be considered.

The consultation seeks views on the new offence and on appropriate safeguards. HMRC has however indicated that most offshore cases will continue to be dealt with through a civil approach.

Civil Sanctions

Furthermore a separate consultation paper sets out the government’s plans to introduce tougher civil sanctions for offshore evaders, including those who move their taxable assets between offshore banks in different countries in an attempt to hide their wealth and evade tax. The consultation examines the situation where an individual moves their assets from one offshore centre which has tightened its tax information sharing laws to another which has not.

Financial secretary to the Treasury David Gauke commented:

“The minority who use offshore secrecy to evade UK tax are making a big mistake. There is nothing wrong with holding assets offshore, but investors must pay the tax they owe here.”

“Those that don’t come forward must face tough consequences, including a criminal conviction,” he said.

Both Consultations End on 31 October.

Should you require further information as a result of a HMRC investigation, please contact either Richard Holliday or Matthew Claughton.

If you would like to contact Olliers Solicitors please complete the form below

Contact Us 2023
Preferred method of contact

Get in touch with one of our specialist solicitors today

Our expert team of experienced lawyers are here to help!

Manchester
London
MLAwards Crime Team of the Year 2024

Copyright © 2024 | Authorised & Regulated by the Solicitors Regulation Authority | SRA No. 597078
Privacy Policy | Accessibility | Complaints | Built by SEO Strategy