HMRC and “Strict Liability” Could Turn us all into Criminals

In an appalling follow up to the removal of full tax relief for the borrowing costs of private property investors, the government has unveiled a new “strict liability” offence for undeclared overseas income.

A strict liability offence is one that does not require the proving of intent to be pursued. It is normally reserved for offences which are inherently dangerous and usually present an immediate danger to life and limb.

The legal profession can now move the mistaken non-declaration of overseas income into the strict liability column right next to the illegal possession of a firearm. We will all of course feel immediately safer in our beds.

At present it is only an offence for income to be hidden if it can be proven that it has been done deliberately; with intent to hide it from the authorities. Now, if this happens by mistake it will be dealt with as a criminal act. A holiday home in Malaga and a poor attention to detail could now land you in a cell.

Honest people are at risk of being thrown into the cells because of the changes; with the government declaring it will be ‘relentless in its pursuit of evaders’.

Tax experts have described the new rule as an ‘unnecessary change which is fraught with unfairness and inconsistency’.

David Sleight, partner at law firm Kingsley Napley damned the change at length and with vigour:

“The problem with what is proposed is that someone could be found guilty of committing tax fraud following a genuine mistake. To impose what would essentially be a reverse burden of proof in circumstances where an individual would be facing a potential custodial sentence cannot be reasonable.  Resources should not be spent on developing a new system that is inherently unfair and which defeats its very purpose. No examples have been given of the kind of behaviour which would be caught by the proposals that are not already covered by offences under current tax evasion provisions. The proposed legislation is complex, confusing and is likely to create more litigation than it resolves. The lack of clarity rather defeats the purpose of the proposed legislation which was apparently designed to be simpler to administer”.