HMRC empowered to name and shame tax evasion ‘enablers’
Treasury says individuals or corporations who take deliberate action to help others evade paying tax face steep fines.
Tax advisers, accountants and lawyers who aid the super-rich with offshore tax evasion will face tough new penalties from New Year’s Day, with HMRC now able to publicly name and shame “enablers”.
The Treasury said the government’s new powers would see individuals or corporations who take deliberate action to help others evade paying tax facing fines of up to 100% of the tax they helped evade or £3,000, whichever is highest.
The new crackdown, first announced by the then chancellor George Osborne in the 2015 budget, will mean HMRC can, for the first time, penalise the facilitators of tax evasion who help to physically move funds abroad or advise on offshore tax saving.
Announcing the new penalties, the financial secretary to the Treasury Jane Ellison 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.”
A new corporate criminal offence of failing to prevent the facilitation of tax evasion will also be introduced this year, with companies held liable if an individual acting on their behalf as an employee or contractor facilitates tax evasion. Previous rules meant a corporate criminal prosecution was only possible if there was proof that the board of directors were aware and involved in facilitating the evasion.
The Treasury said HMRC had secured more than £2.5bn specifically from offshore tax evaders since 2010. However, the department was criticised last November after its new specialist tax evasion unit only successfully pursued one criminal prosecution, despite having identified potential evasion and avoidance worth nearly £2bn after examining the tax affairs of 6,500 super-rich individuals.
Also coming into force on 1 January is a new requirement to correct past tax evasion, which will see anyone who has failed to correct past evaded taxes by 30 September 2018 hit with tough new penalties.
The Treasury said more action was planned in the coming months, including a consultation on a new requirement for businesses and individuals who create complex offshore financial arrangements that bear the hallmarks of enabling tax evasion to notify them to HMRC.
May pledged during her leadership campaign that she would pursue companies and individuals who took part in deliberate tax avoidance. “It doesn’t matter to me whether you’re Amazon, Google or Starbucks: you have a duty to put something back, you have a debt to fellow citizens and you have a responsibility to pay your taxes,” she said.
