Accountancy Age has reported plans for new powers for the UK's HM Revenue & Customs to be included in a new Fraud Bill to be put before Parliament this autumn.
As they say:
The bill proposes to change the definition of fraud in dealings with HM Revenue & Customs from 'knowingly making false statements' to 'deliberately failing to disclose information'.
This is, of course, great news for all of who believe that tax should be managed on the basis of 'all cards being face up on the table'. That requires full disclosure, and anything less is fraud.
But, to no surprise, the profession does not agree:
Clive Gawthorpe, partner at Hacker Young, said: 'There is a significant difference between knowingly making a false statement and deliberately not disclosing information. The Revenue's powers to extract information will be strengthened by this bill.'
Which of course, is true, and exactly what I welcome. But he went on to say:
Under present rules if individuals failed to provide information requested by the taxman in the course of their inquiries, they typically just face fines.Under the new legislation, the omission of information - even as a result of an honest mistake - could be an imprisonable offence.
Now of course it is possible that Gawthorpe has been misquoted, but that's not my experience of Accountancy Age (if I'm honest). And if that's the case what he said is just plain wrong. Honest mistake is not the same as deliberately failing to disclose information, as is obvious. And the Revenue aren't stupid, as I know from conducting many tax investigations. They can tell when someone has made a mistake and when they're deliberately misleading them. No one will go to prison for an honest mistake. Those who evade tax by deliberately failing to disclose information deserve to go to prison. They have committed a fraud and it ill becomes any member of the accountancy profession to defend their right to do so.