LOW-INCOME MIGRANTS are in danger of being caught by the chancellor’s proposed strict liability law that will criminalise offshore income and gains, according to the CIoT’s Low Incomes Tax Reform Group (LITRG).
In two consultation documents, HM Revenue & Customs is seeking views on the design of the new criminal offence, appropriate safeguards and also tougher civil sanctions for offshore evaders including those who move their taxable assets between offshore banks in different countries in an attempt to hide their wealth.
But critics are concerned that strict liability entails a presumption of guilt, where proof of criminal intent is not required.
Chairman of the LITRG Anthony Thomas (pictured) said the proposal is “poorly designed” and that the group “[does] not agree with the principle of it”.
“They may now face a criminal conviction for having that income because the prosecution does not have to prove that they intended to avoid UK tax,” he said.
“When it comes to tax obligations, migrants face particular challenges. Many may simply be unaware of their duties in this country; criminal prosecution for ignorance is alarming and unjustified. Legislation must be designed to reflect the difference between active evasion and non-declaration through the lack of requisite knowledge.
He added the LITRG believes there should have to be at least £5,000 unpaid tax before there is any question of criminal liability. Additionally, the group said in its consultation submission, there should be a ‘reasonable belief’ defence written into statute.
“Virtually all criminal offences require an intention to commit them,” Thomas said. “It is generally neither fair, nor useful, to subject people to criminal punishment for oversights or misunderstandings.
“We are disappointed that this consultation process has been undermined by government having decided the principles of the legislation in advance. The most effective kind of consultation is one where the principles under consideration have been arrived at through consultation with stakeholders from the beginning, not after key decisions on policy have already been taken.”