The Criminal Finances Bill, which includes new criminal offences of failing to prevent the facilitation of tax evasion, is expected to be passed in the 'wash up' period before parliament is dissolved ahead of the 8 June election, according to tax expert Jason Collins of Pinsent Masons, the law firm behind Out-Law.com.
"The only ambiguity left after that will be whether the new government formed after the election will activate the law by the end of September," he said.
However, Collins added that it was "almost inconceivable" that any new government would want to drop the planned changes.
"It would look like they were letting big business off the hook," he said.
Once in force, the Criminal Finances Bill will create two new offences which will effectively make a business vicariously liable for the criminal acts of its employees and other persons 'associated' with it leading to the facilitation of tax evasion, even if the senior management of the business was not involved or aware of what was going on. The first offence will apply to all businesses, wherever located, in respect of the facilitation of UK tax evasion. The second offence will apply to businesses with a UK connection in respect of the facilitation of non-UK tax evasion.
The offences will apply to both companies and partnerships. A business will have a defence if it can prove that it had put in place reasonable prevention procedures to prevent the facilitation of tax evasion taking place, or that it was not reasonable in the circumstances to expect there to be procedures in place.
The government has previously indicated that the offences would come into force in autumn 2017, before the first automatic exchanges of information under the common reporting standard (CRS) take place in September. Once elected, the new parliament will be required to pass a statutory instrument in order to give the new offences legal effect.
Separately, trade body the Chartered Institute of Taxation (CIOT) has written to chancellor of the exchequer Philip Hammond to warn him against rushing the lengthy 2017 Finance Bill through parliament without proper debate. At 762 pages, the bill is the longest on record and contains complex new provisions on loss relief and corporate interest deductibility, among other measures.
The CIOT has urged the government to drop most of the bill and instead force through only urgent measures, such as renewing the provision of income tax and certain simple anti-avoidance measures. Precedent suggests that the committee and report stages of the bill will be compressed into a single day so that it can be approved before parliament is dissolved, rather than face the expected two days of House of Commons debate, various standing committee sessions and a further two days of report stage and third reading debate, according to the CIOT.
The government has confirmed that the bill will be finalised on Tuesday, 25 April. No indications have been given as to which provisions, if any, will be left out of the final legislation. Budget resolutions have been passed to give temporary statutory effect to some of the amendments contained in the bill under the 1968 Provisional Collection of Taxes Act, which will expire seven months from the express coming into force date.