HMRC gets boost to criminal powers

HMRC boost to criminal powers

10th December 2018

HMRC Gets a Boost To Criminal Powers

Here at 6CATS International, we’re always ahead of the latest changes in global tax and compliance in order to provide the best service possible to our clients. Recently, a piece in the FTAdviser titled HMRC gets a boost to criminal powers’ reflected on some important new developments that agencies need to be aware of. The piece states that HMRC has increased its power due to new legislation and will be raising the number of criminal investigations that it undertakes into tax evasion as a result. This is important for recruiters to bear in mind as HMRC is also looking to prosecute entire companies for the tax breaches of employees, making the legality of your contractor compliance solutions more important than ever, should you wish to do business abroad.

Here’s what you need to know:

Failure to prevent the facilitation of tax evasion

HMRC has had a boost to its powers following the introduction of the ‘failure to prevent the facilitation of tax evasion’ offences under the Criminal Finances Act 2017, something we’ve mentioned in previous blogs. The tax authority has stated it will be diverting increased resources towards targeting corporations, employees, agents or any other person in breach of these offences. This applies both in the UK and internationally, making it highly relevant to agencies placing contractors overseas.

Authorities will also focus on the role of the professional adviser, such as accountants or solicitors, referring to them as ‘enablers’. Anyone in this role will be seen as key facilitators of tax evasion whether they are complicit, negligent or unwitting of malpractice.

The compliance defence against these accusations requires firms to provide evidence of ‘reasonable’ procedures designed to prevent the facilitation of tax evasion. This should be a powerful incentive for agencies to put a compliance programme in place or suffer serious consequences.

What HMRC’s boost to criminal powers means for recruiters

The article also states HMRC will be using internet data, including blogs and social media to hunt for tax fraud. In addition to this, it will take advantage of leaks such as the Panama Papers and Paradise Papers, using previously undisclosed data from law firms, corporate registries, banks and financial service providers. In fact, HMRC is expected to collect £100m of extra tax from information within the Panama Papers alone.

A worldwide movement

HMRC’s 2018 business plan explicitly states that it wants to increase the number of criminal investigations it undertakes into tax crime. As we have mentioned time and again, this is a worldwide movement and not limited to any country or continent. With the introduction of the Common Reporting Standards and, as recently as this week, the G20 convening to pledge ‘a globally fair, sustainable, and modern international tax system’, this movement is not slowing. Agencies cannot afford to ignore the growing powers of tax authorities, and the upsurge in co-operation between them. However, this shouldn’t dissuade you from profiting from international markets. With an expert contractor management consultancy, you can rest easy that compliance is taken care off, while you focus on your own expertise.

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