First Insight into HMRC’s use of Corporate Criminal Offences Powers
Change your attitudes towards preventing tax evasion or suffer the consequences. That was the very strong message intended by the government when new Corporate Criminal Offences (CCO) Powers for HMRC were announced in the March 2015 Budget. As such, since 30th September 2017, it has been a crime for corporations to fail to put in place reasonable procedures to prevent associated persons (those acting for or on their behalf) from criminally facilitating tax evasion. With unlimited fines and the reputational damage entailed from a finding of guilt, this was a significant new power.
Nearly 2½ years later, HMRC have announced that it has 9 live CCO investigations with a further 21 “opportunities” under review across 10 different business sectors, including financial services, oils, construction, labour provision and software development. It has further confirmed that these sit across all HMRC customer groups from small business through to some of the UK’s largest organisations.
Going forward, HMRC intends to update this information biannually.
As announced in July of last year, the 2020 Budget introduces a new deferred payment plan option for Corporation Tax charged on profits or gains arising from certain transactions between UK companies and EEA companies of the same group of companies.
Reversal of Inverclyde
The 2020 Budget announced provisions to reverse last year’s FTT decision in Inverclyde. In that case, HMRC denied the appellant LLPs’ claims for Business Property Renovation Allowance on the basis that the LLPs did not carry on a business with a view to a profit.
HMRC nudge letters
HMRC continues to fight the good fight in its quest to cut down on tax avoidance and have recently been issuing further “nudge” letters to taxpayers who may have an income source or assets producing gains overseas and consequently an undisclosed outstanding UK tax liability.
ExxonMobil: FTT Decision Released
The FTT decision in Esso Exploration and Production UK Limited and others v HMRC, which relates to pre-2006 claims for Cross Border Group Relief, has now been released.