Source: HMRC Press Release 30 September 2017
From 30 September 2017, the Criminal Finances Act 2017 introduces two new criminal offences – one applying to the evasion of UK taxes and one applying to the evasion of foreign taxes.
The offences hold corporations and partnerships criminally liable when they fail to prevent their employees, agents, or others who provide services on their behalf, from criminally facilitating tax evasion. This is a significant change from existing law under which they can only be found liable for criminally facilitating tax evasion if the most senior members of the organisation – typically the board of directors – are aware of the facilitation.
Source: accountancyage.com, 27 September 2017
“KPMG’s South African branch has come under fire and suffered a severe reputational hit after becoming caught up in a growing corruption scandal surrounding one of the country’s most powerful families, the Guptas.”
“KPMG is accused of facilitating the family in tax evasion and corruption. The firm denies any wrongdoing but admits to missing several “red flags” in relation to the family’s accounts. At least eight senior KPMG South Africa officials have resigned in the wake of the scandal, including CEO Trevor Hoole.”
“KPMG conceded that audits of Gupta companies: “fell well short of the quality expected, and that the audit teams failed to apply sufficient professional scepticism and to comply fully with auditing standards”.”
“As a result of the scandal KPMG have lost several audit contracts in South Africa, with even more companies considering severing ties. The firm is under investigation by South African regulatory body IRBA and risks being removed from the country’s auditors’ register.”
Source: Tax Justice Network, “The Offshore Wrapper” 28 August 2017
“A man suspected of being a Swiss spy has been indicted in Germany. He is suspected of having been employed by the Swiss intelligence services to spy on German tax officials in an attempt to discover who was involved in a 2010 leak of information from a Swiss Bank. German officials bought CDs containing the data in 2012, and shared it with officials across the European Union. In total the data helped recover €7bn in tax revenue.
The case is one of the stranger cases of state capture by the banking industry we have seen in recent years, and shows that despite claims that it is embracing transparency, the Swiss Government are still willing to go to extreme lengths to protect their banks being used as hubs for dirty money.
However, spies working for the Swiss government may think twice in the future about undertaking such missions, if stories circulating about the arrest of this suspect are to be believed. According to some reports Swiss prosecutors may have blown the cover of their spy by failing to redact passages of documents related to the prosecution of a Swiss banker for leaking the information.”
Source: Thorsteinssons LLP via International Law Office, 30 June 2017
“In BP Canada Energy Company v Minister of National Revenue (2017 FCA 61), the Federal Court of Appeal imposed important restrictions on the use of Section 231.1(1) audit powers by the Canada Revenue Agency (CRA). Read the rest of this entry »
Source: Akin Gump Strauss Hauer & Feld LLP via mondaq 15 May 2017
“The Criminal Finance Act 2017 received Royal Assent on April 27, 2017, making its way onto the statute book before the halting of Parliamentary business ahead of this year’s general election. As well as giving enforcement agencies further powers to recover the proceeds of crime and tackle money laundering, the Act introduces two new criminal offences for businesses that fail to prevent the facilitation of tax evasion.
Businesses should now be reviewing their internal risk assessment processes to ensure that adequate prevention procedures are in place ahead of the implementation date for the new law, which is expected to be September 2017.
The first of the new offences relates to the evasion of UK tax (the “Domestic Offence“), whereas the second relates to the evasion of foreign tax (the “Foreign Offence“).
In each case, liability for the relevant business will be strict unless the business can prove that it had in place reasonable measures to prevent the facilitation of the tax evasion (or that it was unreasonable in all of the circumstances to expect it to do so).
The new offences are cast widely and will apply to all businesses, including funds, portfolio companies, fund managers, special purpose vehicles and others in the financial services sector, which is a particular target and likely to be most affected.”
Source: HMRC Press Release, 4 April 2017
“HM Revenue and Customs (HMRC) has launched a new hotline for the public to report fraud and evasion in the fight against tax fraud.
Customers can report all kinds of tax fraud and evasion on the new hotline, including PAYE and National Insurance fraud, undisclosed offshore investments, non-payment of the National Minimum Wage, tax credit fraud, failure to pay UK duty, tax evasion and VAT fraud.
The HMRC Fraud Hotline – on 0800 788 887 – is open between 8am – 8pm seven days a week, 365 days a year.”
Source: tax justice.net 15th March 2017
“The #LuxLeaks whistleblowers appeal verdict is in and once again it demonstrates what an upside down world we’re living in, when whistleblowers on the frontline of tax justice find themselves convicted for a second time for exposing information that was so clearly in the public interest.
Disclosure of such information can be decisive for driving political change, and this is exactly why tax deals in Luxembourg were brokered behind closed doors.
Now it’s time to swing the spotlight onto accountancy firm PwC not only for the disgraceful way they treated these whistleblowers, but to hold them to account for their role the whistleblowers exposed in siphoning off tax revenue from so many EU member states.”
Source: HMRC Press Release 7th January 2017
HM Revenue and Customs has revealed its top ten most significant fraud and organised crime cases of 2016.
HMRC’s criminal investigations have led to 679 individuals being convicted for their part in tax crimes, with sentences for 2016 totalling more than 730 years.
Many of the cases won by HMRC in 2016 involved company directors, accountants and organised criminals. These individuals were involved in a wide range of criminal activity including excise smuggling, hiding assets from HMRC in offshore accounts, and frauds disguised as tax avoidance schemes.
The ten most significant cases each came with large prison sentences.
Source: theguardian.com 1 January 2017
The president of the European commission, Jean-Claude Juncker, spent years in his previous role as Luxembourg’s prime minister secretly blocking EU efforts to tackle tax avoidance by multinational corporations, leaked documents reveal.
Proposals opposed by Junker’s Luxembourg included; plans for tax authorities in each member state to subject their dealings with multinational businesses to peer review; an investigation into cross-border tax avoidance strategies, known as “hybrid mismatches”, often used by multinationals to conjure up artificial tax savings; improved information sharing between member states on tax deals granted to multinationals in private.
Source: The Guardian 15.11.2016
An aggressive tax avoidance scheme used by temp recruitment agencies is depriving the taxpayer of “hundreds of millions” of pounds a year, a Guardian investigation has found.
A number of agencies have been making large windfalls by using “contrived” financial arrangements to slash their employer’s national insurance bills.
The schemes also generate millions more pounds for participants by exploiting VAT rules that were originally designed to benefit very small businesses.