Advisers warn that HMRC’s tax evasion proposals will ‘presume guilt’

Advisers have this week raised concerns over HMRC’s proposals to introduce a new criminal offence and civil sanction against those involved in offshore tax evasion.

HM Revenue & Customs have released two consultation documents, seeking opinion on the design of the new criminal offence, safeguards, and civil sanctions for those using offshore accounts to evade tax.

The consultation will examine the situations in which individuals have moved assets from an offshore centre that has tightened tax information sharing laws to a centre that has more relaxed rules.

Also under scrutiny is the 20 year limitation on how far back HMRC are permitted to examine a taxpayer’s affairs – this rule could be suspended following the consultation.

Advisers are concerned that these proposals will remove the previous focus on demonstrating tax evasion beyond reasonable doubt and will instead presume guilt. It has also been argued that the change comes too soon after the introduction of new measures in April 2011, with advisers noting that there has not yet been an opportunity to assess the effectiveness of said measures.

Commenting on the proposals, Ben Dunn, Finance Director at JSA Services said: “There is a real worry about how the consultation will affect contractors. We’d recommend that any contractor who is worried they may be involved in a scheme that does not meet HMRC tax regulations should get in contact with us”.

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