I referred yesterday to the press release issued by law firm Pinsent Masons that suggested HMRC had increased its tax recovery from affluent people by 60% but that this still left it at a pitifully low level.
I noticed this morning that some of the tax press had picked up another feature of what Pinsent Masons had to say. As International Adviser noted:
The London-headquartered law firm said that, while the money raised through compliance should be welcomed, HMRC needs to carefully weigh up the benefits of increased investigations against potentially damaging effects on the economy.
[Pinsent Masons spokesperson] Bullock added: “The apparent disappearance of the proposed strict liability offence of offshore tax evasion are hopeful signs that HMRC is getting the message on this front.”
I have already commented this morning on the FT's concern that action on Greece should not "frighten the market". Here we have another example of the same attitude. A firm of lawyers is quite clearly advocating a light touch approach to law enforcement because, it is implying, making sure that the law is complied with might "have damaging effects on the economy". Or, to put it another way,their clients might have to pay what they owe.
This is another case where it is clear that the financial elite are saying that whatever parliament may decide, and whatever the law might be, the reality is that the interests of wealth must prevail. It's not even subtle in saying so.
When lawyers aren't too sure bout law enforcement, preferring instead the interests of a wealthy elite, we need to worry.
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That principle was conceded a while ago: the Corner House judgement, and BAE’s success in halting a criminal investigation.
Just to rub it in, British Aerospace are the opening act in the Ministry of Justice’s conference on law and constitution, celebrating the anniversary of Magna Carta.
What you’ve brought to our notice today, is that a bespoke service for major corporations and strategically-important sovereign states has been opened up to a wider customer base.
We can’t call it ‘routine’ yet, but the going rate for ‘economic interest’ overriding lawful obligations in taxation is coming down: hundreds of millions instead of billions. Likewise, immunity from prosecution for a widening selection of criminal offences: it’s not a crime (or rather: not an investigated crime) if you’re a bank or a billionaire.
Think of it as the democratisation of impunity; give it a decade, and a couple of million will halt anything short of a murder investigation.
The problem with strict liability is that unless you get the de minimis right you’re going to catch every low wage economic migrant who’s sending money off to an interest bearing account back home. Which is neither fair nor practicable. Go ahead and throw the book at those who’ve made a conscious decision to try to skip their obligations to society, but *criminalising* those who weren’t aware, and couldn’t reasonably have become so, of their “obligation” doesn’t feel right to me.
Does struct liability for driving offences also feel wrong to you?
And have you not noticed that despite it existing millions of offenders are not prosecuted?
Is that because discretion is used?
I think you are making a fuss unnecessarily
If you’re going to use discretion, why is strict liability needed?
There are two options:
1) If you have an offshore bank account and use it to avoid tax, then you get penalised.
2) If you have an offshore bank account, you get penalised. Unless you don’t use it to avoid tax, in which case you might be let off.
(1) is the current position, (2) is what you’re suggesting. Each depends on someone (HMRC or the courts) deciding whether what you did was wrong, and applying the penalty only if it was – the difference is the presumption of guilt, and the fact that in (2) the innocent person has to hope for a reprieve rather than being punished for an innocent error.
My own view is that criminal sanctions should only be applied to cases of deliberate wrong-doing. Not to cases of ignorance of the law. Robert Maas did a blog a few months ago with a lot of very plausible examples of people who would be caught who are clearly not being abusive.
As you well know strict liability is needed so intent does not have to be proved
Recent cases provide clear reason for this
If Robert Maas opposes it you can be quite sure it is needed.
It is better that ten guilty persons escape than that one innocent suffer…
No one will suffer if innocent
There has to be an offence for the penalty to be imposed
Richard, Pinset Masons double standards are similar to those of that paragon of ethical values and guardian of all that’s lawful, as illustrated by his response to the new Greek government, (courtesy of today’s Guardian): ‘the head of the European commission, Jean-Claude Juncker, warned that a reduction in the country’s debt was “not on the radar”.
Strange that, given he’s been so instrumental in reducing the tax bills of so many multi-national companies, thereby saving them millions/trillions.
But no, Mr Juncker knows on what side his bread is buttered, and it certainly isn’t anyone whose not part of the 1%. Good to see we have such a impartial man as head of the EC. Syriza take note (if you haven’t already done so).