Tackling offshore tax evasion

In August HMRC issued two consultation documents on offshore tax evasion which proposed the strengthening of civil penalties and the introduction of a ‘strict liability’ criminal offence. Such an offence could result in convictions where taxpayers failed to disclose the full amount of their overseas income, even where this was not done deliberately.

We have submitted our representations on the proposals, which are available here (for the civil penalty document) and here (for the criminal offence document).

Our representations make it clear that we do not seek in any way to defend the fraudulent evasion of tax, whether offshore or onshore. However, we object in principle to the introduction of a strict liability offence in this area. The tax affairs of wealthy individuals are complex, particularly those of individuals with business interests in more than one jurisdiction. It is inevitable that from time to time mistakes will occur or the taxpayer will hold a different view from HMRC as to the correct legal position.

We therefore consider it entirely inappropriate that a taxpayer should be at risk of criminal conviction as a result of a course of action that even HMRC agrees did not arise from anything other than an oversight, a misunderstanding, or a tenable view of the law that was ultimately held to be erroneous.


Private client tax team

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