In March this year, HM Revenue & Customs announced plans to introduce a new strict liability criminal offence for offshore evasion meaning that in the worst cases it’s no longer possible to plead ignorance in an attempt to avoid criminal prosecution. In its response to the HRMC consultation exercise on the subject, which closed yesterday, Kingsley Napley criticised the proposed strict liability offence as “unclear, unworkable and ultimately unjust”.

“Tax evasion by definition requires a deliberate act to deprive the revenue of monies to which it is entitled. There must therefore logically be a specific intent to evade tax for the offence to be made out. As such, the basis of any prosecution should require proof of fraudulent or dishonest behaviour. The problem with what is proposed is that someone could be found guilty of committing tax fraud following a genuine mistake,” said partner at the firm, David Sleight, who specialises in defending companies and individuals facing investigation and action by HMRC.

"No examples have been given of the kind of behaviour which would be caught by the proposals that are not already covered by offences under current tax evasion provisions. The proposed legislation is complex, confusing and is likely to create more litigation than it resolves. The lack of clarity rather defeats the purpose of the proposed legislation which was apparently designed to be simpler to administer,” added Sleight.