ACCA: Tax offence penalises ‘simple ignorance’
The creation of a new, strict liability offence to tackle offshore tax evasion may have serious unintended consequences, the Association of Chartered Certified Accountants (ACCA) has warned.
In its formal response to HMRC’s consultation on the proposed new offence, ACCA said it would be unfair to attach a criminal record to someone whose conduct was “clearly not criminal”.
Chas Roy-Chowdhury, ACCA’s head of taxation, said: “Of course offshore tax evasion should be taken seriously, but … creating a strict liability does not give any room for manoeuvre.
“For example, an economic migrant who works legally, pays tax on the income in the UK and then sends funds to his home country to his family. If you are unaware of how the tax system works you might assume that because tax has been paid on that income already that that is the end of the matter. What they do not realise that if that money is then banked tax will be owed on any interest earned, irrespective of whether it is a UK bank.”
ACCA noted that there were “ever greater numbers of individuals falling within the UK tax net who have offshore connections but very little in the way of taxable wealth or income”.
HMRC’s consultation paper said the government was minded to operate a de minimis threshold to “ensure that only conduct with a significant impact is subject to the offence”. Legislating for the threshold would bring “inflexibility and a clear cliff-edge”.
Source: accountingweb-ACCA: Tax offence penalises ‘simple ignorance’
