The House of Lords rushed through the reporting state and third reading of the Criminal Finances Bill on 25 April and sent the bill back to the Commons to ratify a few minor amendments. The Commons quickly passed the amendments in 26 April. In introducing the bill, Baroness Williams of Trafford said:

Following the decision last week to call a general election, this is likely to be the last opportunity for the House to scrutinise this legislation. ​As noble Lords have said, it has had cross-party support throughout its parliamentary passage and I am very grateful to noble Lords, through the usual channels, for enabling us to take both Report and Third Reading today. Time is very short, but we all agree that this Bill will deliver valuable powers to fight money laundering, prevent the financing of terrorism and combat corruption. I hope we can maintain consensus on the way forward and return the Bill swiftly to the Commons.

The bill did in fact pass swiftly through the lords, amendments 6 to 12, 15 to 19 and 25 to 50 were agreed to, and the House of Commons will consider those amendments today (26 April). The cross-party amendment to require a register of the beneficial ownership of companies based in UK overseas territories like Anguilla, Bermuda, the British Virgin Islands, the Cayman Islands, Montserrat and the Turks and Caicos Islands did not pass. The lords felt that this issue should be debated again by the next parliament.

Timeline for implementation

The Bill provides for commencement of the provisions from a date to be appointed by the Treasury. It is expected that this will be from September 2017, to coincide with the start of the first exchange of information under the Common Reporting Standard.

Before implementation, organisations of any size and type need to ensure that they have reasonable procedures in place.

Will the new tax evasion offences make it through before Parliament is dissolved?

Theresa May called an election yesterday. Parliament will most likely vote to hold one today, and in less than two weeks, by 2nd May, according to the Leader of the House of Commons, Parliament will be dissolved and the country will head towards polling day on 8th June.

It’s taken everyone by surprise, not least those of us in the compliance space who were carefully preparing for the Criminal Finances Bill and the introduction of two new offences to tackle tax evasion.

The Criminal FInances Bill had already worked its way through most parliamentary stages. It was due to be considered by the Lords at report stage on 25th April, prior to its third reading in the Lords, scheduled for the 3rd and 8th of May, and then Royal Assent sometime after that. The least we know is that timetable has gone out the window.
Continue reading

The gig economy has a compliance problem

The gig economy is creating a multitude of unpaid tax liabilities, and HMRC may be ready to use new tax dodging laws to crackdown on start-ups and their “self-employed” workers.

In 2017 the Criminal Finances Bill and Finance Bill comes into force, making it easier to prosecute the professional services that seek to help tax evaders, as well as the lawyers and accountants devising or selling schemes, to help people avoid tax. So how will a crackdown on tax evaders and tax avoiders impact the gig economy?

HMRC launched a consultation document in 2016 called “Tackling the hidden economy: extension of data-gathering powers to money service businesses.” This promises new powers for HMRC to gather and acquire data from online intermediaries and electronic payment providers to uncover those who are operating in the “hidden economy.”
Continue reading