Oh well done, this is an advance in freedom and liberty, isn’t it?

You have asked for my opinion on Part 3 of the Criminal Finances Bill.

This part of the Bill seeks to tackle the promotion of tax evasion by the employees of companies and partnerships. The proposed sanction is a fine on the company responsible for permitting its employee, agent or representative to promote tax evasion.

Whilst the primary focus of the legislation is on UK tax evasion overseas tax evasion linked to a UK activity is also covered.

The nature of tax evasion is widely defined and is not linked solely to corporation tax. Other taxes are covered, as is National Insurance.

The drafting of the relevant sections of proposed law is similar in style to the UK Bribery Act 2010.

The Bill creates what is, in effect, a strict liability offence: evidence of intention is not required for conviction under the terms of this Bill; all that is required is evidence that tax evasion has taken place. Many in the tax profession dislike such provisions. I do not share their concerns: attempts to tackle tax evasion have for too long been undermined by the difficulty of proving intent when evidence of evasion having taken place is readily available.

It is a fairly fundamental point that you need to intend to be naughty to be found to have been naughty,no?

But Curajus, you know…..

28 thoughts on “Oh well done, this is an advance in freedom and liberty, isn’t it?”

  1. Bloke in North Dorset

    Mens rea seems to have completely vanished from the legal system. I suppose we’re only following the USA.

    I see from Guido that Vaz is on the scrutinising committee, truly these fuckers have no shame.

  2. Other than the ‘intent’ bit, we have of course been here before.

    s99 TMA 1970 penalised “assisting in making an incorrect return” (for any tax purpose) and there was at least one subsequent addition to this. Number of penalties or prosecutions under such provisions? None.

    So, a good bit of tub thumping but I confidently predict there will be no convictions.

    I wonder how this sits with those columns Ritchie wrote ages ago? I mean, he might not have intended that they inspire someone to evade tax, but suppose they did?

  3. So, strict liability for a law you could drive a bus through the loopholes. That will be a real incentive for the Government to make their intent clearer when drafting future tax law. Or won’t.

    Of course, it is another nail in the coffin of smaller enterprises. The Regulatory State favours big players who can afford the overhead of huge compliance and legal teams. This cost isn’t really proportional to turnover or firm size. Small firms cannot compete so we end up with huge multinationals dominating everything.

    At which point Richie and his friends will scream “HOOGE MULTINATIONALS!!” and shit their nappies, again.

  4. The idea of strict liability doesn’t make me too comfortable in an area of law where the “premier tax expert” in the media cannot tell the difference between tax avoidance and tax evasion, and nor can most of the media and politicians.

    The laws themselves are vague and HMRC is useless and lazy in working out what even they think you owe anyway.

    Do the Left ever notice the similarity between the “FASCISM!!!” they yell at their opponents and the actual State they yearn to build?

  5. “It is a fairly fundamental point that you need to intend to be naughty to be found to have been naughty,no? ”
    Bearing in mind the sheer number of “strict liability” offenses one can be captured for, nowadays, seems generous to be giving the financial advice industry a pass.

  6. Not that I agree with Ritchie, but isn’t the tax system the place strict liability started? For example, it doesn’t matter about intention, if your transaction is effectively a sham, the taxman can ignore it.

  7. Mens rea seems to have completely vanished from the legal system. I suppose we’re only following the USA.

    Mishandling classified information is a strict liability offense in the USA… unless you’re a Clinton.

  8. It’s a great illustration of the “them and us” divide between lawmakers and public. Didn’t a Labour minister break an immigration law she herself put through the Commons, then successfully claimed ignorance of it?

  9. This cracked me up in comments of the prior post, Tim

    ‘Hey do I need to engage with a minor Austrian school libertarian?’

    OF course not Murphy, but as regular as clockwork come the time of the Autumn statement, apparently every authority in the UK must genuflect to this fringe crank, unquestionably the commentator with the greatest gulf between his own self-regard and his actual level of knowledge of any pundit prevaricating across the UK today.

  10. Dave said:
    “Not that I agree with Ritchie, but isn’t the tax system the place strict liability started? For example, it doesn’t matter about intention, if your transaction is effectively a sham, the taxman can ignore it.”

    Civil vs criminal. We might say that your tax planning was ineffective and you’ll have to pay the tax anyway, but jailing you should need a higher standard of proof.

    But I accept it’s an increasingly blurred boundary.

  11. So Much For Subtlety

    Rob – “Didn’t a Labour minister break an immigration law she herself put through the Commons, then successfully claimed ignorance of it?”

    Dianne Abbott was once denouncing some law or other. I pointed out to her that in fact she voted for it.

  12. >> It is a fairly fundamental point that you need to intend to be naughty to be found to have been naughty,no?

    I am not sure about this. I always understood that for things like tax evasion, ignorance of the law was not an acceptable defence. Otherwise it is too easy to not pay anything and just say ooops sorry, if anyone catches you.

  13. So Much For Subtlety

    The Guardian ran an article claiming that gardening was racist.

    Tens of thousands of blameless housewives were, I presume, expected to perform self-criticism.

    The Left has long since abandoned mens rhea (which is a type of evil Argentinian bird I believe)

  14. It’s a great illustration of the “them and us” divide between lawmakers and public. Didn’t a Labour minister break an immigration law she herself put through the Commons, then successfully claimed ignorance of it?

    Baroness Scotland (in the Lords): http://www.dailymail.co.uk/news/article-1263948/Baroness-Scotland-lied-seeing-illegal-cleaner-Loloahi-Tapuis-passport.html

    The same Baroness Scotland that expects Commonwealth taxpayers to pay hundreds of thousands of pounds to do up her Mayfair grace-and-favour home, and pay for the education of her adult children: http://order-order.com/people/baroness-scotland/

  15. Have HMRC stopped telling temporary software workers to use service companies then?

    Note that temporary includes that old bloke in the corner still tapping away on his laptop after all these years that no one has the courage to ask: “Who the fuck are you then?”.

  16. Ritchie: “Sixth, the measure does not address the issue of tax avoidance”

    For a bill looking at criminal finances. You can see his plan.

  17. Argh! So I can be prosecuted for avoiding tobacco tax by not smoking? And avoiding beer tax by not drinking? Legality is about prohibiting *actions* not prohibiting *inactions*.

  18. jgh

    “so I can be prosecuted by not drinking”

    Pay your “fair share” and get yourself down the supermarket more often.

    And when your GP later raises an eyebrow, you simply look him in the eye and say “I don’t believe in tax avoidance”.

    The second bit might even be mildly worth it for the amusement factor.

  19. Bloke in North Dorset

    “Argh! So I can be prosecuted for avoiding tobacco tax by not smoking? And avoiding beer tax by not drinking? Legality is about prohibiting *actions* not prohibiting *inactions*.”

    They’ve learnt from Obama Care, you get fined for not having health insurance.

  20. Should be interesting when HMRC win a test case for something ambiguous and it turns out half the businesses in the country have being unknowingly breaking the law.

  21. @Dave If your transaction is effectively a sham, surely yon must have intended it to be so? Otherwise how is it a sham?

  22. Bloke in North Dorset

    “Should be interesting when HMRC win a test case for something ambiguous and it turns out half the businesses in the country have being unknowingly breaking the law.”

    Or lose one and we all find we’ve been paying too much tax over the years. Which is why they don’t like court cases, ambiguity and settling out of court works in their favour

  23. New here and O/T but….

    Why does Murphy brook no criticusm whatsoever of Mrs Stemcir aka Shirkey Hodge(?) of Islington council child abuse fame and katterly Chair of of the Treasury Committee ?
    Her family had offshore funds all over the place but she claims ignorance thereof until such time as she inherited at which piint she deckared to hmrc.

    Are we really to believe her family never discussed these matters internally before the death of the patriarch??

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