HM Revenue & Customs (HMRC) has proposed new rules, under which businesses would be made liable for the actions of their staff aiding tax evasion.
Under the proposed rule, employers whose staff helps tax dodgers could face criminal prosecutions and unlimited fines unless they show that they have taken necessary measures to curb the illegal practices.
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HMRC in a statement said: "The new corporate offence aims to overcome the difficulties in attributing criminal liability to corporations for the criminal acts of those who act on their behalf."
Usually, making corporates liable for their employees’ actions requires prosecutors to show that the company’s most senior members and those at the board of directors were involved and aware of the offence, HMRC added.
However, as decisions are often taken at a level lower than that of the board of directors, the corporation is often protected from criminal liability.
"The existing law can act as an incentive for the most senior members of a corporation to turn a blind eye to the criminal acts of its representatives in order to shield the corporation from criminal liability."
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By GlobalDataThe new move, which aims to cover UK as well as overseas tax evasion, have been proposed in the wake of the data leak known as Panama Papers that have revealed how the world’s wealthy evade tax.
The leak, which revealed many illustrious names, also included the name of Prime Minister David Cameron’s father in association with an investment fund he opened in Panama.
