Increased penalties for people who fail to pay taxes due on money held in offshore banks, along with levying significant fines on companies who try to evade taxes and those who help them, are to be introduced in the United Kingdom.
The new plans, coming with just weeks left in the life of the Conservatives/Liberal Democrats government, are seen as a direct reply to the controversy caused by disclosures that HSBC had conspired with wealthy individuals to evade billions in taxes.
"For too long, our tax system struggled with the fact that a small minority felt it perfectly okay to indulge in tax avoidance and commit the crime of tax evasion. The public will not tolerate being stolen from any more," said chief secretary to the treasury, Danny Alexander.
The treasury will “consult” on its plan to introduce a new strict liability criminal offence, which would mean that it would “no longer be possible to evade large sums of tax and plead ignorance in an attempt to avoid criminal prosecution”.
The proposal was first put forward last year, but it was heavily criticised at the time by the Law Society who warned that it would fall foul of the law because it would damage the right to a fair trial.
Lawyers then believed that the treasury had dropped the idea, but it has resurfaced in the wake of a series of allegations about HSBC and Pricewaterhousecoopers' involvement in Luxembourg tax deals for Amazon and other multinationals.
Claiming that £100 billion has been raised from tougher collection efforts, Alexander said he wanted regulatory bodies, such as the chartered accountants body, to set and enforce “clear professional standards”.
Currently, individuals can be prosecuted if they fail to act to prevent tax evasion, though the charge is difficult to prove. However, Alexander said he now wanted to make corporations criminally liable in the same way.
"It will no longer be possible to evade large sums of tax and plead ignorance in an attempt to avoid criminal prosecution," a paper entitled Tackling Tax Evasion and Avoidance published by the treasury declared.
Meanwhile, fines will match the offence: “We will increase financial penalties for offshore evaders, including, for the first time, linking the penalty to underlying assets.”
