An announcement made by Danny Alexander, Chief Secretary of the Treasury, stated that companies assisting those who seek to evade tax will face penalties and criminal prosecution under tough new laws.
The burden on tax authorities to prove there is an “intent to evade tax” will be removed, making it more likely that offenders will be prosecuted. In February this year, Alexander said there needs to
be a crackdown on corporate tax evasion. He commented:
“For too long, our tax system struggled with the fact that a small minority felt it perfectly OK to indulge in tax avoidance and commit the crime of tax evasion. The public will not tolerate being stolen from anymore.”
A criminal offence of “strict liability” is set to be introduced for offshore tax evaders, which will make it much harder for evaders to claim that they weren’t aware of the evasion. Among the plans is an offence that will tackle those companies that help others to evade tax or make it possible. If employees of a company are permitted to aid others in evading tax, the company will charged as an accomplice.
Penalties against offshore tax evaders are to be raised, and may be more than the sum being evaded, in accordance with other assets. Those who assist evaders will likewise be charged a penalty, which will be the same or more than the amount being dodged.
According to the Institute of Chartered Accountants in England and Wales (ICAEW), the government should wait until other new measures have had the chance to take effect. The head of the ICAEW professional body, Frank Haskew, said that a number of regulations had been introduced in recent times, which may be sufficient to tackle evasion and avoidance. Haskew also added that it was possible that innocent people could be accused as a result of mistakes made due to a complicated tax system.
Legitimate ways to minimise bills
Tax allowances and relief
Make sure all tax allowances and reliefs are claimed to reduce the amount of taxable income. Claims for business mileage and research and development relief are just a couple of ways to reduce a tax bill.
Pension contributions
Increase the amount of pension contributions made so that you have less taxable income and claim back tax relief when you complete the self-assessment process. It is possible to reduce your tax bill in a legitimate manner. Find more help with accounting and finance for your London-based business in our information centre..