The number of serious UK tax evasion cases has risen by 20% amid expectations of further prosecutions.
According to tax advisors Pinsent Masons, the Criminal Finance Act 2017 is behind this increase. The act, which requires companies to ensure that their contractors are not facilitating evasion, is just one of many new weapons that HMRC has in its arsenal.
Along with the data that the department receives under the Common Reporting Standard, the act has seen total cases increase from 3,216 in 2016/17 to 3,809.
HMRC also has access to data on UK taxpayers’ offshore accounts from the Crown Dependencies and Overseas Territories.
The department already has a strong ability to identify severe tax evasion, and this will likely improve further. In September 2018, the UAE and Hong Kong will have to send in data on offshore accounts. There will also be a mandatory disclosure regime for intermediaries as well as a strict liability offence.
Jason Collins of Pinsent Masons said: “We are likely to see even more prosecutions in the future. [The new strict liability offence] makes it a criminal offence to not declare offshore income of more than £25,000 and means that HMRC does not have to prove intent…Prosecuting a business will send a very strong message to businesses to clean up their act. Any business which has not got appropriate procedures and policies in place is at risk.”
HMRC and its specialist directorates will be on the lookout for any unusual transactions as the organisation comes under political pressure to crack down on tax evasion.