HMRC consult on criminal offence for recklessness in direct taxes

At ‘tax update day’ on 23 June the government issued a consultation on a proposed offence for reckless untrue statements for direct taxes.

The consultation is seeking views on proposals to introduce a new criminal offence for making reckless untrue statements or declarations in direct tax. The change would bring direct tax rules in line with existing indirect tax offences and give prosecutors an alternative charge in cases where ‘dishonesty’ cannot be proven but ‘reckless behaviour’ is clear.

This consultation explains the reasons for the reform, potential impacts, and options for sanctions, and invites stakeholders to share their views before the policy is finalised.

The consultation is asking nine (9) questions in all:

Question 1: Do you agree that a criminal offence for making reckless untrue statements or declarations should be introduced for all direct tax matters? And if not applied to all direct tax matters, why not? Please give reasons for your response.

Question 2: What impacts do you foresee for taxpayers, advisers, and other stakeholders if an offence for making reckless untrue statements or declarations is introduced for direct tax?

Question 3: Are there particular types of behaviour or circumstances that you believe should or should not fall within the scope of the new offence? Please give reasons for your response.

Question 4: We are interested to hear whether consultees find ‘statement’ or ‘declaration’ easier to understand. Please explain your answer and provide any alternatives.

Question 5: How might the introduction of a reckless untrue statements or declarations offence affect compliance behaviour among individuals and businesses?

Question 6: What challenges or risks do you foresee in implementing this change, and how might they be mitigated?

Question 7: Do you have any other comments or suggestions regarding the proposed change?

Question 8: Do you believe this option best achieves proportionality and deterrence for a direct tax recklessness offence, and why?

Question 9: Do you agree that fines should be unlimited on indictment? If not, what alternative would you propose and why?

The consultation closes on 16 August 2026, however, due to annual leave plans we are working to a much tighter deadline.

If you do have any comment or observations on any or all of the questions poised above, can you please email Steven on [email protected] by close of play on 31 July.