Cameron to announce criminal offence for tax evasion

In the wake of the release of the Panama Papers, the UK is to bring forward plans to introduce a criminal offence for corporations who fail to stop their staff facilitating tax evasion, the prime minister will announce later today in a statement to the Commons

For the first time, companies will be held criminally liable if they fail to stop their employees from facilitating tax evasion, David Cameron said.

At the March 2015 Budget, the Chancellor said the government would be delivering on its pledge to introduce the measure in this Parliament. Now Cameron has confirmed that the offence will be introduced in legislation brought forward this year.

The government has also confirmed plans to create a cross-agency taskforce to investigate all evidence of illegality that has emerged from the so-called Panama Papers.

Cameron said: ‘This government has done more than any other to take action against corruption in all its forms, but we will go further.

‘That is why we will legislate this year to hold companies who fail to stop their employees facilitating tax evasion criminally liable.’

The move comes ahead of next month’s London anti-corruption summit, to be hosted by the prime minister on 12 May.

Cameron said the summit was aimed at ‘stepping up global action to expose, punish and drive out corruption in all walks of life’.

As well as agreeing a package of actions to tackle corruption across the board, it will deal with issues including corporate secrecy, government transparency, the enforcement of international anti-corruption laws, and the strengthening of international institutions.

It will be the first summit of its kind, bringing together world leaders, business and civil society to agree a package of practical steps to expose, punish and drive out corruption, the government said.

At the end of last year, HMRC published the responses to four consultations held on the introduction of new criminal offences for offshore tax evasion.

These include the following:

  • a new criminal offence for corporations that fail to take adequate steps to prevent the facilitation of tax evasion;
  • tougher financial penalties for offshore evaders, including a penalty based on the value of the asset on which tax was evaded as well as wider public naming of offshore evaders;
  • a new penalty regime for those who enable tax evasion, based on the amount of tax evaded and public naming of enablers; and
  • a new criminal offence to make prosecution easier by removing the need to prove intent where a large amount of tax has not been paid on offshore income and gains.

Details of the response to the consultations, A new corporate criminal offence of failure to prevent the facilitation of tax evasion, is available here

Pat Sweet |Reporter, Accountancy Daily [2010-2021]

Pat Sweet was the former online reporter at Accountancy Daily and contributor to the monthly Accountancy magazine, pub...

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