Firms to be held responsible for tax evasion by staff in new legislation

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Firms that aid tax evasion will be held criminally responsible for the actions of their staff under legislation to be introduced in Parliament this year, David Cameron will announce as he attempts to draw a line under the Panama Papers row.

The Prime Minister will give details of the plans as he faces his critics in the Commons for the first time since it emerged he had invested in an offshore trust set up by his father Ian.  

Legislation expected to be contained in the Queen's Speech in May will create the new offence, which will mean that firms will be held criminally liable if they fail to stop their employees from facilitating tax evasion.

The Prime Minister said: "This Government has done more than any other to take action against corruption in all its forms, but we will go further.

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

The move comes ahead of an international anti-corruption summit in London on May 12 and follows the announcement of a new task force aimed at investigating the evidence from the Panama Papers data leak.

Proposals for the measure were announced in March 2015 and put out for consultation and Mr Cameron has now confirmed the introduction of the new legislation.

The London anti-corruption summit had been planned long before the leak of 11 million documents from Panama law firm Mossack Fonseca thrust the issue of tax dodging back into the spotlight.

The Prime Minister has used a series of international gatherings to push for action on corporate transparency, which is one of the reasons the affair has proved embarrassing for Mr Cameron.

The Panama Papers leaks included details of Blairmore Holdings, the firm set up by Ian Cameron - which until 2006 used "bearer shares" to protect clients' privacy - and which Mr Cameron and his wife had an investment in until they sold their stake for £30,000 in 2010.

The Prime Minister has insisted it is a "fundamental misconception" to suggest Blairmore was set up to avoid tax, instead asserting that it was established after exchange controls went so people could invest in dollar-denominated shares and companies.