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'