SCHEDULES
SCHEDULE 20Penalties for enablers of offshore tax evasion or non-compliance
PART 1Liability for penalty
Liability for penalty
I11
1
A penalty is payable by a person (P) who has enabled another person (Q) to carry out offshore tax evasion or non-compliance, where conditions A and B are met.
2
For the purposes of this Schedule—
a
Q carries out “offshore tax evasion or non-compliance” by—
i
committing a relevant offence, or
ii
engaging in conduct that makes Q liable (if the applicable conditions are met) to a relevant civil penalty,
where the tax at stake is income tax, capital gains tax or inheritance tax, and
b
P “has enabled” Q to carry out offshore tax evasion or non-compliance if P has encouraged, assisted or otherwise facilitated conduct by Q that constitutes offshore tax evasion or non-compliance.
3
The relevant offences are-
a
an offence of cheating the public revenue involving offshore activity, or
b
an offence under section 106A of TMA 1970 (fraudulent evasion of income tax) involving offshore activity,
c
an offence under section 106B, 106C or 106D of TMA 1970 (offences relating to certain failures to comply with section 7 or 8 by a taxpayer chargeable to income tax or capital gains tax on or by reference to offshore income, assets or liabilities).
4
The relevant civil penalties are—
a
a penalty under paragraph 1 of Schedule 24 to FA 2007 (errors in taxpayer's document) involving an offshore matter or an offshore transfer (within the meaning of that Schedule),
b
a penalty under paragraph 1 of Schedule 41 to FA 2008 (failure to notify etc) in relation to a failure to comply with section 7(1) of TMA 1970 involving offshore activity,
c
a penalty under paragraph 6 of Schedule 55 to FA 2009 (failure to make return for 12 months) involving offshore activity,
d
a penalty under paragraph 1 of Schedule 21 to FA 2015 (penalties in connection with relevant offshore asset moves).
5
Condition A is that P knew when P's actions were carried out that they enabled, or were likely to enable, Q to carry out offshore tax evasion or non-compliance.
6
Condition B is that—
a
in the case of offshore tax evasion or non-compliance consisting of the commission of a relevant offence, Q has been convicted of the offence and the conviction is final, or
b
in the case of offshore tax evasion or non-compliance consisting of conduct that makes Q liable to a relevant penalty—
i
Q has been found to be liable to such a penalty, assessed and notified, and the penalty is final, or
ii
a contract has been made between the Commissioners for Her Majesty's Revenue and Customs and Q under which the Commissioners undertake not to assess the penalty or (if it has been assessed) not to take proceedings to recover it.
7
For the purposes of sub-paragraph (6)(a)—
a
“convicted of the offence” means convicted of the full offence (and not for example of an attempt), and
b
a conviction becomes final when the time allowed for bringing an appeal against it expires or, if later, when any appeal against conviction has been determined.
8
For the purposes of sub-paragraph (6)(b)(i) a penalty becomes final when the time allowed for any appeal or further appeal relating to it expires or, if later, any appeal or final appeal relating to it is determined.
9
It is immaterial for the purposes of condition B that—
a
any offence of which Q was convicted, or
b
any penalty for which Q was found to be liable,
relates also to other tax evasion or non-compliance by Q.
10
In this Schedule “other tax evasion or non-compliance by Q” means conduct by Q that—
a
constitutes an offence of cheating the public revenue or an offence of fraudulent evasion of tax, or
b
makes Q liable to a penalty under any provision of the Taxes Acts,
but does not constitute offshore tax evasion or non-compliance.
11
Nothing in condition B affects the law of evidence as to the relevance if any of a conviction, assessment of a penalty or contract mentioned in sub-paragraph (6) for the purpose of proving that condition A is met in relation to P.
12
In this Schedule “conduct” includes a failure to act.