A proposed new strict-liability offence of failing to tell HM Revenue & Customs about overseas income could undermine the rule of law, the Law Society has said, urging the government to reconsider the plan. 

Under the new offence, prosecutors would need to demonstrate only that a person failed to correctly declare income or gains from overseas, and not that there was an intention to defraud the exchequer.

In its consultation which closed last week, the government says that ‘hundreds’ of offences do not require the demonstration of mens rea. Examples include firearms offences, cruelty to animals and statistical reporting offences, it says. 

However in its response, the Law Society said that the introduction of strict liability in an area where knowledge or intent has long been understood as essential ‘would cause a break with established legal constructs, which would unnecessarily confuse a previously understood area of the law’.

Its concerns are further compounded by the lack of evidence showing that the measure will achieve the government’s intended objective. ‘We believe that proposals like this one undermine the rule of law and would urge the government to reconsider its plans,’ the Society’s tax committee says. 

‘Prosecutions for a strict-liability offence punishable with a custodial sentence for non-compliance with a 30,000-plus page tax code is likely to give rise to breaches of the fundamental principle of a right to a fair trial,’ it says. Absence of knowledge or intent should be a complete defence to an offence of dishonesty.

Committee chair Gary Richards added: ‘We support the objective behind this proposal: to deter tax evasion. However, introducing a new strict-liability offence is not the answer. There are already criminal offences punishable with fines and imprisonment for tax evasion. Imprisonment is not the answer to securing the maximum collection of tax due.

‘Instead, HMRC needs to focus on increasing detection and building on its previous successful policy of cooperation agreements and disclosure facilities.’