• Home »
  • Big stories »
  • UK tax professionals face criminal charges for assisting evasion

UK tax professionals face criminal charges for assisting evasion

By Neasa MacErlean

23 March 2015 at 08:56 BST

Professionals 'who enable tax evasion' will share the fate of some of their clients under UK proposals - being fined the same sum as their clients, being prosecuted for 'two new criminal offences' and being publicly named and shamed.

Tax advisers will face criminal penalties in the UK for economic crimes, the new term for evading tax nobeastsofierce

UK government plans also propose 'a new strict liability criminal offence for offshore evasion – so in the worst cases it is no longer possible to plead ignorance in an attempt to avoid criminal prosecution'. The government is to consult on the proposals which include 'a criminal offence for corporates to fail to prevent tax evasion or the facilitation of tax evasion on their watch'. Fines will be linked 'for the first time' to the value of assets kept in offshore bank accounts. The government hopes to introduce the new laws next year. Even if the current administration loses the election in May, the opposition has given its support to the proposals - so it would seem likely that they would be introduced. 

Punish and deter

The minister announcing the proposals, Danny Alexander, who holds the role of Chief Secretary to the Treasury, said: 'We’re making it a crime if companies fail to put in place measures to stop economic crime happening in their organisations. We’re also making sure that the penalties on those that facilitate evasion are large enough to punish and deter.'

Changing the vocabulary

While the plans will be of most interest to the accountancy firms which have advised on international tax planning, lawyers will also be aware that they may need to step carefully in order to avoid falling on the wrong side of the proposed laws. For instance, the UK tax authorities appear to be hoping to change the words used to describe tax wrong-doing. While 'tax avoidance' has been seen as acceptable in the past - as it was seen as including steps such as making pension contributions - a new paper from the Treasury defines it as 'bending the rules of the tax system to gain a tax advantage that Parliament never intended' and including 'contrived, artificial transactions'. The Treasury now defines 'tax planning' as an acceptable alternative to 'tax avoidance' and includes making pension contributions as part of 'tax planning'. Sources: Treasury and Treasury paper 'Tackling tax evasion and avoidance'


Also read...

Human rights claims against companies a matter for Congress, not courts

Human rights abuses are a matter for Congress, according to a US Supreme Court case on financing militant attacks.