The government is to create a strict liability offence of offshore tax evasion despite the reservations of bodies including the Law Society, the chief secretary to the Treasury announced today.
In a statement trailed in yesterday’s budget speech, Danny Alexander MP (pictured) also said professionals who ‘enable’ evasion would face the same penalty as the tax evader.
The strict liability criminal offence for offshore evasion follows a consultation last year in which the Law Society described the proposal as a potential threat to the right to a fair trial.
It said that the absence of knowledge or intent should be a complete defence to an offence of dishonesty. Today’s announcement said that the government would consult further before legislation is introduced, and consider ‘appropriate defences and thresholds’.
Other measures announced today include:
- New civil penalties on those who enable evasion so they will face the same penalty as the tax evader;
- A new criminal offence for corporates failing to prevent tax evasion or the facilitation of tax evasion on their watch;
- A promise to ’publicly name and shame’ both evaders and those who enable evasion.
Alexander said: ‘Tax evasion is a crime like any other. If people help a burglar, they are accomplices and criminals too. Now it will be the same for those that help tax evaders.’
He called on tax and accountancy professional regulatory bodies who police professional standards to maximise their role in setting and enforcing clear standards around enabling and promoting avoidance.
Details on the new evasion regime and avoidance sanctions are outlined in a report Tackling tax evasion and avoidance published today.