DPP Business Tax

New Penalties For Tax Fraud And Evasion In Finance Bill 2017

The Finance Bill 2017 has introduced several new penalties regarding tax evasion, in the government’s bid to tackle these crimes. Tax fraud and evasion have hit the headlines many times in recent years, and the new bill looks to not only prevent new crimes from occurring but to also seek out those from the past.

Penalty for Failing to Correct

A “requirement to correct” any past offshore tax evasion by the 30th September 2018 has been introduced by the Finance Bill 2017. Anyone who has not taken the opportunity to correct any past offshore tax evasion by this date will be subject to a new, tougher penalty for their crimes.

Why has this penalty been put in place?

The new ‘failure to correct’ penalty will provide a strong incentive for taxpayers to get their offshore tax affairs in order, and to put them in front of HMRC for review. HMRC will then be able to view the full CRS data.

Penalty for participating in VAT fraud

Missing Trader Intra-Community (MTIC) fraud costs the exchequer between £0.5 billion and £1 billion every year. Anyone who is found to be actively participating in, or has previously participated in VAT fraud will be subject to these new, tougher penalties.

The penalty will be at a fixed rate of 30%, which will apply to businesses and company officers in the cases where they were aware of the VAT fraud-related transactions that took place.

Why has this penalty been put in place?

The new penalty has been put in place to address any problems that arise between the existing regime and the principle of knowledge that’s used to tackle VAT fraud of a more serious nature – MTIC fraud in particular.

Penalty for “enablers of tax avoidance which is defeated”

The Finance Bill 2017 has also put in place new penalties for lawyers, accountants and tax advisors who make a profit from enabling fraudulent or evasive tax arrangements. Please see our guide for more information on this.

Why has this penalty been put in place?

This new penalty has been put in place to help deter advisors from becoming enablers. It also aims to ensure that tax professionals are encouraged to provide genuine advice on legal arrangements to help their clients with their tax affairs.

I’ve been accused of tax fraud or evasion, what should I do?

If you’ve been accused of tax evasion, we strongly advise that you seek professional legal advice, from someone who has experience in this field.

Our team at DBT & Partners have years of experience in all types of tax law, and are on hand to assist you with your case. Contact DBT & Partners today for more information on your next steps.

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