The amount of criminal convictions has fallen by 28% since September 2009 to just 157 whilst the number of cases sent to prosecutors has plummeted since 2004.
It is believed that HMRC officials discussed the strategy of seeking more prosecutions in order to deter tax evaders and show a tougher stance.
The conclusion was that:-
“Criminal investigation work did have a significant part to play as a deterrent, and HMRC should think hard about whether they were doing enough in the conventional tax area.”
However, it has been reported that the reason HMRC are putting forward less tax cases for prosecution is because they are worried about losing cases.
This speaks volumes as it seems as though HMRC are not confident in the laws and legislation they are trying to push.
They have, on the other hand, had a high success rate in recent prosecutions (around 90%) but this merely adds to the suspicion that the taxman’s fear of losing cases means they are not taking up as many cases as they should be doing.
It is a risk to their reputation to lose too many cases.
The most popular choice of criminal prosecutions last year involved “missing trader” VAT fraud which robs the Exchequer of billions of pounds per year.
Almost half of all prosecutions involved VAT fraud.
Kinsella Tax Investigations says:-
“HMRC’s main function is to bring in revenue, not to spend money prosecuting tax evaders who, when caught, may not have any cash to settle the account.
So, HMRC are caught between the devil and the deep blue sea.
Comments by Dave Hartnett that ‘if you evade tax you’ll be found out and you could be prosecuted’ does increase the pressure upon HMRC to become a prosecuting body rather than bringing in the revenue that is their main function.