Creates risk for banks, trustees, financial advisers, accountants, lawyers and more

Commenting on HMRC’s consultation 'Tackling offshore tax evasion: a new corporate criminal offence of failure to prevent the facilitation of evasion', which opened today, Jason Collins, Partner at Pinsent Masons, the international law firm, says:

“The proposed legislation allows HMRC to target a very broad range of organisations. It is not only banks that will be affected by the creation of the new criminal offence, but a long list of accountancy and law firms, trustees and financial advisers, and even support services like company formation providers, who should now be paying very close attention to the risks created by this legislation.”

“The proposed legislation is also extremely broad geographically, with foreign corporations falling within its scope, as well as UK corporations that facilitate the evasion of taxes overseas, even if there is no loss to HM Treasury in this country.”

Tax Forms 1“There would be difficulties prosecuting foreign companies through the UK's courts, but many will want to make sure they comply with these rules for fear of damage to reputation.”

“But the unintended effect of this is that banks might decide instead to close their UK facing operations, which cannot be good for the UK. It may be better for the government to look at introducing this type of offence in concert with other jurisdictions rather than going it alone."

“This new measure looks likely to produce further red tape for a wide range of businesses who will be forced to put new policies and procedures in place for their employees and undertake careful due diligence on any third parties to whom they refer customers ”

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