HMRC launches new consultation into tax evasion laws for corporates, as Panama Papers scandal rumbles on

 
Hayley Kirton
Follow Hayley
Cargo ship, Panama Canal
The proposed law would require companies to take greater responsibility for preventing tax evasion (Source: Getty)

HM Revenue & Customs (HMRC) has today opened a consultation seeking input on a new offence aimed at businesses which fail to prevent tax evasion.

The consultation concerns draft legislation published last December, which would introduce a new offence for corporates that fail to take adequate measures to prevent those working on their behalf from committing, or helping to commit, tax evasion.

The planned offence will cover both UK and overseas tax evasion.

The consultation document argues that the current legislation places too high a burden of proof on prosecutors to be able to punish companies for tax evasion carried out by somebody who is working for them. The proposed legislation aims to overcome this by pushing more responsibility up to the board level and encouraging internal checks and reporting.

Read more: The fallout from Panama has only just begun

The consultation will run until 10 July.

HMRC's ongoing battle against overseas tax evasion has become particularly relevant since the release of the International Consortium of Investigative Journalists' (ICIJ) Panama Papers report, which implicated a number of high-profile figures in offshore tax dealings and was based on leaked information belonging to law firm Mossack Fonseca.

Shortly after the report was published, HMRC issued a statement confirming that it had requested access to the information received by the ICIJ.

Panama papers: What you need to know

Meanwhile, last week, Prime Minister David Cameron announced the launch of a new UK tax taskforce, which would be headed up by HMRC and the National Crime Agency and revealed that the taxman was already following up on 700 leads related to Panama.

However, last Friday, the Public Accounts Committee published a report criticising HMRC for not doing enough to reduce the amount it was losing to tax fraud and called on the agency to make it clearer in its annual reports how its compliance work was helping to cut down on such losses.

Related articles