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Treasury targets £12bn from tax avoidance by 2020

A strict liability criminal offence and tough treatment of serial offenders form a central part of the strategy

16 March 2016

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A series of tax evasion measures that target businesses and individuals will see the treasury recoup £12bn by 2020, George Osborne has told the Commons.

Among these is a proposal to make access to 'licenses or services for businesses conditional on them being registered for tax'.

'We will shut down disguised remuneration schemes, ensure that UK tax will be paid on UK property development, change the treatment of freeplays for remote gaming providers, limit capital gains tax treatment on performance rewards, and cap exempt gains in the employee shareholder status,' the chancellor said in his budget statement.

'Termination payments over £30,000 are already subject to income tax. From 2018, they will also attract employer national insurance. Taken altogether, the further steps in this budget to stop tax evasion, prevent tax avoidance and tackle imbalances in the system will raise £12bn for our country over this parliament.'

The government has already made clear its plans to press ahead with a strict liability criminal offence for offshore income and gains.

'Under the "strict liability" offence for offshore evasion it will be automatically assumed that the taxpayer's actions were criminal in nature without HMRC having to prove it,' commented John Cassidy, a tax investigations partner at Crow Clarke Whitehill.

'This is a massive step. Anyone found to have under declared tax related to offshore assets will be guilty of a criminal offence and therefore liable to prosecution if HMRC chooses that route.'

Osborne reiterated that the general anti-abuse rule (GAAR) will be reinforced with a new penalty equal to 60 per cent of the tax due.

Both of these measures are included in the Finance Bill 2016; the bill will also strengthen HMRC's hand when dealing with serial avoiders.

The new powers include 'a special reporting requirement and a penalty on those whose latest return is inaccurate due to use of a defeated scheme; publication of these avoiders' names; and, for those who persistently abuse reliefs, restrictions on their access to certain tax reliefs for a period.'

 

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Tax & Wealth structuring