Cameron announces new tax evasion law

Britain moves to criminalise firms whose employees abet tax evasion in wake of Panama Papers leak

LONDON • British Prime Minister David Cameron yesterday announced plans to make companies liable for staff facilitating tax evasion, in his first parliamentary appearance since the Panama Papers triggered a row over his own tax affairs.

Mr Cameron told MPs in the House of Commons that he is bringing forward proposals to criminalise firms whose employees abet tax crimes in the wake of the so-called "Panama Papers" leaks that exposed how the wealthy put their money in offshore havens.

The measure should be written into law this year, according to a press release from his Downing Street office.

"This government has done more than any other to take action against corruption in all its forms, but we will go further," Mr Cameron said.

"That is why we will legislate this year to hold companies who fail to stop their employees facilitating tax evasion criminally liable."

The law will target companies with lax supervisory mechanisms and firms that purposefully promote tax evasion.

DO MORE, BRITAIN

Britain must exercise influence over its overseas territories. We have to make that clear to the Brits in upcoming talks.

MR RALPH BRINKHAUS, parliamentary group deputy leader for German Chancellor Angela Merkel's Christian Democrats.

The Prime Minister is facing a rough ride on Parliament's return from the Easter break after he was forced to admit he had held shares in his father's Bahamas-based investment fund Blairmore Holdings, which cropped up in the leaked documents from Panama law firm Mossack Fonseca.

In an effort to draw a line under the issue, Mr Cameron on Sunday released a summary of his tax affairs for the past six years, and yesterday his spokesman said the Prime Minister believed it was right for British finance ministers, opposition party finance spokesmen and potential future British leaders to publish their tax return information.

The four-page document detailing his tax affairs, prepared by a firm of chartered accountants, showed Mr Cameron's salary as prime minister, income from a house he rents out in London and interest on his savings. Over the six years through to April last year, he paid £402,283 (S$770,960) in tax on earnings of £1.08 million, according to the data.

But he triggered further criticism on Sunday when newspapers reported he had been given £200,000 by his mother in an act that some interpreted as an attempt to avoid inheritance tax. His office said the gift, in two £100,000 payments in May and July 2011, is an often-used piece of planning to reduce inheritance tax liability.

The government says it is serious about tackling tax evasion and says it has tracked down £2 billion from offshore tax dodgers since 2010. It has also established a registry of company beneficial ownership information due to become public in June this year.

Next month, the Prime Minister will host the London Anti-corruption Summit.

European partners have accused Britain of doing too little to clamp down on offshore havens, many of which are British territories.

Senior officials from German Chancellor Angela Merkel's ruling coalition on Sunday called on Mr Cameron to fight tax havens more decisively.

"Britain must exercise influence over its overseas territories. We have to make that clear to the Brits in upcoming talks," Mr Ralph Brinkhaus, the parliamentary group deputy leader for Dr Merkel's Christian Democrats, told Welt am Sonntag newspaper.

Mr Cameron announced on Sunday that Britain was to launch a £10 million taskforce to scrutinise the Panama Papers.

The force will be led by HMRC - Britain's tax authority - and the National Crime Agency, and will investigate the leaked files from Mossack Fonseca.

In a statement, the government said HMRC experts are already investigating 700 leads with a link to Panama.

AGENCE FRANCE-PRESSE, REUTERS, BLOOMBERG

A version of this article appeared in the print edition of The Straits Times on April 12, 2016, with the headline 'Cameron announces new tax evasion law'. Print Edition | Subscribe