UK Treasury Department Approves New Penalties For Tax Evasion
The HM Revenue & Customs (HMRC) department in the UK is now empowered to name and shame all those financial intermediaries who are acting as enablers for the ultra-rich to evade tax. This is one of the many new laws being introduced by the government to tackle tax evasion.
Under the new powers granted to the department, all individuals and corporations who facilitate evasion of tax by their clients are now liable to be slapped with a penalty equivalent to 100 percent of the tax amount that they helped to evade or £3,000, whichever is higher. The law will cover accountants, tax advisers, lawyers and all others who assist tax evasion.
This measure was introduced by previous Chancellor George Osborne in the 2015 budget, and is the first time where intermediaries will be held accountable for tax evasion. Another new law that will soon come into force will have companies held accountable for any tax evasion activities carried out by an individual working on their behalf. The law will make such action a corporate criminal offence.
Earlier corporate criminal tax evasion cases could be prosecuted only if it was proven that the company’s board of directors was actively involved in it. Furthermore a bill being put in place will require tax payers from January 2017 to correct past instances of tax evasion.
Anyone failing to do so by 30 September 2018 will be facing newly introduced penalties that are tough.
In a statement Jane Ellison financial secretary to the Treasury said,
Tax evasion is a crime and as a government we have led reform of the international tax system to root it out. Closer to home we are creating a tax system where taxes are fair, competitive and paid. The raft of measures we have introduced to tackle avoidance and evasion will create a level playing field for the vast majority of people and businesses who play fair and pay what is due.
The Treasury department has said that further measures were being planned including a public consultation on a move that will require UK businesses to notify HMRC when they are entering into complex offshore arrangements that are similar to offshore deals. This major shift in policy follows Prime Minister Theresa May’s vow to pursue all companies and individuals who are deliberately indulging in tax avoidance.
According to the Treasury, the HMRC has so far collected £2.5 billion from offshore tax evaders. However the department has been criticized for having succeeded in only one criminal prosecution despite having evaluated the records of over 6,500 ultra-rich individuals and identified potential avoidance or evasion amounting to £2 billion.
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