Financial advisers have promptly raised concerns over the new HMRC proposal to introduce criminal offences and civil sanctions in offshore tax evasion cases.

In two consultation documents, HM Revenue & Customs is seeking views on the guidelines of the new criminal offence, necessary safeguards and also more stringent civil sanctions for offshore evaders including companies who pay high earning employees through offshore banks and those who move their taxable assets between offshore banks in different countries as a way of trying to hide their wealth.

Increased penalties of up to 200% of the tax for offshore income tax and capital gains tax liabilities have applied since the tax year commencing April 2011.

The consultation examines situations in which individuals move their assets from one off shore centre that has tightened its tax-information-sharing laws to another that has more relaxed rules. The 20-year rule limiting how far back HM Revenue & Customs can scrutinise taxpayer’s affairs may also be suspended under the new proposals.

Phil Berwick, Phil Berwick, head of contentious tax at law firm Irwin Mitchell has stated he believes that the new proposal is “draconian” and airs a “statutory presumption of guilt”.

Previously, for HMRC to successfully prosecute a person for tax evasion they had to prove beyond any reasonable doubt that the individual intended to evade tax. That obligation may now no longer be required under the new proposals.

HMRC is “seeking to re-write the rules on offshore penalties before there has been an opportunity to establish the effectiveness of the current regime, which was only introduced in April 2011,” he said.

Saffery Champness tax partner Ronnie Ludwig was sceptical of the effect the move will have on tax yield, linking the proposal to the disappointment of the Swiss tax agreement.

“Whether these new measures will actually be effective in getting evaders to pay up is anyone’s guess,” he said. “The results to date of HMRC’s wider efforts to tackle evasion using existing measures have fallen far short of expectations.

“The potential of handcuffs really represents more of a new scare tactic than anything else, as truly hardened evaders the world over are likely to continue to ignore or avoid the UK taxman.”