New civil penalties announced for those who facilitate tax avoidance

Revealed during the 2015 Budget, the government has introduced new measures to discourage tax avoidance. Headlining these measures are two new criminal offences and higher penalties, which cannot only be brought against those who avoid tax, but also those who enable tax avoidance.

The two new headline measures introduced by the government include a new offence which makes it illegal for corporates to fail to prevent tax evasion or the facilitation of tax evasion on their watch and an increase in penalties which includes, for the first time, the ability for the government to link the penalty to the amount of wealth kept offshore. The measures announced also include the provision for civil penalties on ‘evasion enablers’, so that they will face the same penalties as the evader themselves.

Speaking about the new measures, Chief Secretary to the Treasury, Danny Alexander, 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.

Tax evasion is a crime like any other. If people help a burglar, they are accomplices and criminals too. Now it will be the same for those that help tax evaders.”

The government is still to consult on exactly how the wider administration of their new tax avoidance scheme will be implemented, which means that it could still be a little while before we see what effect the new changes have on discouraging avoidance and producing extra revenue for the government.

Citing current efforts, the government highlighted that over the course of the parliament that has just ended, as a result of their actions on evasion, avoidance and non-compliance, HMRC will have secured £100 billion in additional revenue. This includes more than £31 billion from big businesses and an extra £1.2 billion from the UK’s 6,000 richest people, who each have a net worth of £20 million or more.


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