In his Summer Budget, the Chancellor announced plans to commit more resource to help identify and tackle tax evasion on wealthy taxpayers perceived to be understating and underpaying their taxes.
By the recent merger of its hitherto separate (civil) Specialist Investigations and Criminal Investigation teams, HMRC considers that the resultant mix of trained tax investigators and criminal lawyers will bring about a joined up approach to cost effectively tackling tax fraud and sending out a message that the department will identify and deal robustly with those who are cheating the system.
Following stinging criticism from the Public Accounts Committee and armed with specific additional funding of £60m by the end of this parliament, HMRC is now targeting a three-fold increase in criminal tax prosecutions. HMRC views the richest in society as a valid target for an increasingly aggressive approach and measures such as the proposed new ‘Strict Criminal Liability’ power will potentially result in those failing to report offshore income being subjected to mandatory criminal sanctions rather than civil.
Time is running out for evaders to come forward and voluntarily approach HMRC to disclose historic tax irregularities. We reported last week on the impending closure of the Liechtenstein Disclosure Facility (LDF) at the end of 2015. After that, the valuable benefit of being able to settle past tax liabilities through the LDF, including immunity from criminal prosecution for tax offences, will no longer be available.
What with the increasing global financial transparency brought about by the introduction of the Common Reporting Standard in 2017, those with issues to disclose to HMRC should make sure they come forward voluntarily without delay.