The Queen’s Speech in May saw the government announce its intention to bring the proposed Criminal Finance Bill before Parliament that will hold UK companies responsible for failing to prevent their staff facilitating tax evasion anywhere in the world by creating a new criminal offence for corporations that do not take action.
The announcement follows the recent publication of the Panama Papers and increased public concern over tax evasion. This has compounded the political pressure on the government to be seen to be taking action to tackle tax evasion.
In May, the government held an anti-corruption summit at which this and similar measures were mooted.
Speaking in April, Prime Minister, David Cameron said: “This government has done more than any other to take action against corruption in all its forms, but we will go further.
“That is why we will legislate this year to hold companies who fail to stop their employees facilitating tax evasion criminally liable.”
These anti-corruption measures have received some support from the accountancy profession, with the Institute of Chartered Accountants in England and Wales (ICAEW), the Association of Accounting Technicians (AAT) and others signing a statement of support for this and other measures, which states: “We know criminals seek to abuse the services provided by our members to launder the proceeds of corruption and we are committed to ensuring the professions we serve are armed with the tools to thwart this abuse.”
However, the specific details of the Criminal Finances Bill and the provisions to create a new criminal offence have not yet been published, so some concern remains about whether some legitimate tax planning measures could be affected.