Under the new rules, a person’s state of mind will not be taken into account when standing trial, meaning the prosecution will only need to demonstrate that a person failed to correctly declare the offshore income or gains, and not that they did so with the intention of defrauding the Exchequer.
This also means that “ignorance of the tax rules” will no longer provide a valid defence.
In a consultation paper, the government body also set out plans to introduce tougher civil sanctions on those who have moved their taxable assets between offshore banks in different countries, in an attempt to hide their wealth.
Under these rules, penalties for tax evasion will be directly linked to the transparency of the territory in which the income or gain arises.
A spokesperson for HMRC said: “Where it is harder for [us] to get information from another country, the penalties for failing to declare income or gains arising in that country are [even] higher.”
The 20-year rule limiting how far back HMRC can look at a taxpayer’s affairs could also be suspended.
A consultation period will run until 31 October, allowing those affected by the new law an opportunity to issue their response.
Financial secretary to the treasury, David Gauke, said that those using offshore secrecy to evade UK tax are making a “big mistake”.
“Thanks to this government’s leadership, countries across the world have agreed to share information on offshore account,” he said. “Over 56,000 people have already told HMRC about what they owe offshore, and it has offered opportunities to clear things up as quickly and easily as possible.
“Those that don’t come forward must face tough consequences, including a criminal conviction.”
Last week, HMRC and the Government of Liechtenstein agreed to prevent users of UK employee benefit trusts (EBTs) from reaping the benefits of the Liechtenstein Disclosure Facility (LDF).
The Government body said the agreement will “level the playing field”, after it decided that many EBT users were using the LDF, which allows those with undisclosed tax liabilities to reach a settlement on predefined terms, in a way that was “not intended”.