FINANCE BILL 2001
CLAUSE 28: EVASION, MISDECLARATION AND NEGLECT
SUMMARY
This clause gives effect to Schedule 6 to the Act, which makes provision for and in connection with the imposition of criminal and civil penalties for the evasion of aggregates levy and for related misconduct.
SCHEDULE 6
AGGREGATES LEVY: EVASION, MISDECLARATION AND NEGLECT
CRIMINAL OFFENCES
Paragraph 1. Evasion
This paragraph is based on existing provisions for other taxes.
The purpose of this paragraph is to provide that being knowingly concerned in, or in the taking of steps with a view to, the fraudulent evasion of aggregates levy is a criminal offence.
Furthermore, the paragraph lays down the maximum sentence for a person found guilty of committing such an offence.
Paragraph 2. Misstatements
This paragraph is based on existing provisions for other taxes.
The purpose of this paragraph is to provide that the making of certain misstatements in connection with aggregates levy is a criminal offence.
Furthermore, the paragraph lays down the maximum sentence for a person found guilty of committing such an offence.
Paragraph 3. Conduct involving evasions or misstatements
This paragraph is based on existing provision for other taxes.
The purpose of this paragraph is to provide that certain conduct involving evasions and misstatements in relation to aggregates levy is a criminal offence.
Furthermore, the paragraph lays down the maximum sentence for a person found guilty of committing such an offence.
Paragraph 4. Preparations for evasion
This paragraph is based on existing provisions for other taxes.
The purpose of this paragraph is to provide that the commission of certain preparatory acts in connection with fraudulent evasions of aggregates levy is a criminal offence.
Furthermore, the paragraph lays down the maximum sentence for a person found guilty of committing such an offence.
Paragraph 5. Criminal proceedings, etc.
This paragraph provides that sections 145 to 155 of the Customs and Excise Management Act 1979, which make general provisions as to proceedings for offences, mitigation of penalties and certain other matters shall apply in relation to offences and penalties under this Part of the Schedule as they apply in relation to offences and penalties under the customs and excise Acts.
The purpose of this paragraph is to provide for consistency of treatment.
Paragraph 6. Arrest
This paragraph provides for the power of arrest where an authorised person has reasonable grounds for suspecting that a fraud offence has been committed and that the person in question is guilty of the offence.
This paragraph provides a definition of an ?authorised person? and a ?fraud offence?.
CIVIL PENALTIES
Paragraph 7. Evasion
This paragraph provides for the issue of a civil penalty for some cases of dishonest evasion of aggregates levy. The purpose of this paragraph is to provide the option of treating some cases civilly rather than criminally in line with other taxes.
To become liable to a penalty, a person (which includes a registered person, a person who is required to be registered and a person who would be required to be registered but for exemption) must engage in dishonest (but not necessarily criminal) conduct with a view to evading aggregates levy. The penalty is equal to the amount of aggregates levy evaded or intended to be evaded. The penalty will not apply where a person is convicted of any offence in relation to the same conduct.
Paragraph 8. Liability of directors etc. for civil penalties
The purpose of this paragraph is to enable the Commissioners to recover the full amount or a portion of a penalty issued to a company from a named officer of a company in circumstances where the company is liable to a penalty and it appears to the Commissioners that the conduct giving rise to the penalty was in whole or in part attributable to the dishonesty of a named officer of the company. In these circumstances, the company is liable only for the balance of any penalty assessed which has not been so apportioned.
The paragraph contains further provisions relating to notification, appeals and other such matters.
Paragraph 9. Misdeclaration or neglect
This paragraph is based on existing provisions for other taxes and provides for a 5% penalty to be levied in instances where (1) a return is made which understates a person's liability to levy (or overstates his entitlement to a tax credit or repayment) or (2) a person who has received an assessment which understates his liability does not take reasonable steps to notify the Commissioners of that fact within 30 days of the assessment being made.
However, where a person who has overstated or understated his liability in a return corrects the return in a later return in a manner prescribed in regulations, the penalty under this paragraph will not be applied.
The paragraph ensures that a person will not be liable to a penalty under this paragraph where in accordance with regulations the person provides full information about the error to the Commissioners at a time when that person has no reason to believe that the Commissioners are making enquiries into his affairs.
Furthermore, if the person satisfies the Commissioners or, on appeal, an appeal tribunal that there is a reasonable excuse for the error, he will not be liable to such a penalty. Furthermore, if a person is convicted of any offence or is assessed to a penalty for evasion, he will not be liable to a penalty under this paragraph.
INTERPRETATION OF SCHEDULE
Paragraph 10.
This paragraph provides an interpretation of some of the terms used in Schedule 6.