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HMRC Fails to Fine a Single Offshore Tax Enabler in Five Years Despite Penalty Powers

HM Revenue and Customs (HMRC) has not fined a single 'enabler' of offshore tax evasion or non-compliance in the past five years, despite an offshore enabler penalty being in place in the UK throughout this period. This information was revealed through data released under freedom of information legislation to The Bureau of Investigative Journalism (TBIJ).

HMRC Fails to Fine a Single Offshore Tax Enabler in Five Years Despite Penalty Powers

The offshore enabler penalty, introduced in 2017, can impose fines up to £3,000 ($3,803) or the total amount of tax evaded, whichever is larger. An enabler is defined as “any person who knowingly helps their client to avoid or evade tax.”

Dan Neidle, founder of the Tax Policy Associates think tank, expressed his frustration, stating, “The never-ending stream of new HMRC powers … are bloody pointless if the powers aren’t then used.” Neidle's organization was not involved in obtaining the data.

Stephen Daly, a tax academic at King’s College London, described the absence of any offshore enabler penalties as “bizarre.” He questioned, “Why would the government want to introduce such a power only to leave it sitting idly by?”

RPC tax disputes partner Michelle Sloane also found the lack of enforcement surprising, given the extensive sources of information available to HMRC. “It’s an area I expect the next government will wish to concentrate on,” she added.

Cyprus Company Formation

In response to the TBIJ investigation, an HMRC spokesperson stated: “We have a strong track record in tackling offshore non-compliance. Since the launch of our No Safe Havens strategy in 2019, we have secured almost £700 million from offshore initiatives.”

Earlier this year, ITR reported that HMRC had not charged a single company for failing to prevent tax evasion under the Criminal Finances Act 2017. This act was introduced to hold UK companies and partnerships accountable if they failed to prevent their employees or associates from facilitating tax evasion.

A spokesperson for HMRC at the time explained: “Corporate criminal offences were introduced to encourage organizations to put preventative measures in place to stop tax evasion. Our efforts have helped drive a corporate culture shift towards anti-tax evasion awareness, which has led to new procedures across business sectors.”



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