Proposed offence for reckless untrue statements – Direct taxes – LITRG response
LITRG has responded to the government’s consultation on the proposed introduction of a criminal offence for direct taxes to mirror the offence of recklessly making untrue statements or declarations currently available for indirect taxes.
LITRG does not support the introduction of such an offence in its proposed form. One of the main arguments advanced by HMRC in favour of the proposal is that it would address an inconsistency between indirect and direct tax offences. However, we think there needs to be further consideration of why that inconsistency exists, and whether it needs to be addressed, before pursuing this proposal.
One of our key concerns with the proposal is that the consultation document does not make clear how HMRC will distinguish between civil cases of failure to take reasonable care and criminal cases of recklessness.
If HMRC proceed with this measure, we make a number of recommendations, with the aim of ensuring that the measure affects only those targeted by this consultation.
Overall, we are not convinced that HMRC have made a case for introducing a criminal offence across all direct taxes. We feel there is a strong argument that the test for criminal prosecution should remain restricted to those who have, beyond all reasonable doubt, acted dishonestly.
You can read LITRG’s full submission using the link provided. A link is also given to the original consultation on GOV.UK.