HMRC Proposes Fines for Aiding Tax Dodgers
April 18, 2016 Taxation in UK
LONDON – New rules mean that UK prosecutors will have an easier time pursuing businesses which help their clients dodge taxes.
Over the weekend the UK HM Revenue and Customs released a new consultation document on proposed rules introducing fines and criminal charges for any person, staff member, or business aiding or facilitating tax evasion.
In its consultation paper the HMRC claimed that the burden of proof placed on prosecutors chasing tax evaders is currently too high, as under present regulations, prosecutors are required to show that the majority of senior members of a business are involved with, or at least aware, that their staff members were helping facilitate illicit tax dodging for their clients.
The requirement to show that the Board was aware of the actions allowed senior staff members to “turn a blind eye” to any illegal activity and claim that they were unaware of any wrongdoing.
Under the proposed rules, businesses will be required to show that they took reasonable steps and precautions to ensure that staff members did not engage in, facilitate or aid any tax evasion.
The effect of the new rules would encourage greater oversight of staff and tax affairs, while also removing a senior board members excuse of ignorance to tax evasion.