What Is Tax Evasion?
Tax Evasion is illegal and involves individuals, corporation and trust deliberately evading taxes. It often involves taxpayers knowingly misrepresenting their tax affairs to reduce their tax liability to tax authorities. It often involves incorrect and dishonest tax reporting. Examples of which include declaring less income than was generated, less profits or gains than was actually earned, or exaggerating costs and deductions.
At KinsellaTax we understand your dilemma. Perhaps you have been wrongly accused of evasion, perhaps you trusted your accountant a bit too much in that “perfect scheme”, or perhaps you have just overlooked your reporting of income to HMRC.
Is Tax Evasion the same as Tax Fraud?
Tax Fraud and Tax Evasion are very similar, both involve misleading the tax authorities in order to pay less tax.
Tax evasion is a type of tax fraud and is part of the overall definition of ‘Tax Fraud’. Fraud is an act of deceiving or misrepresenting, which is essentially what somebody does when they evade taxes.
What Is The Difference Between Tax Evasion And Avoidance?
Denis Healey, former British Chancellor of the Exchequer, provided an interesting quote saying “the difference between tax avoidance and tax evasion is the thickness of a prison wall”. Tax avoidance is classed by some people as ‘clever financial planning’, whereas tax evasion is legal.
Tax evasion is defined as the following: The deliberate failure to pay taxes, commonly by making a false report.
It involves taxpayers deliberately concealing the true state of affairs to HMRC to reduce their tax liability. Dishonest evasion reporting includes understating your income, profits or gains and overstating your deductions.
Tax avoidance is the legitimate structuring of your tax affairs in order to lower your tax liabilities. It is defined in the Collins English Dictionary as: The use of legal methods to pay the smallest amount of tax possible.
How far back can Tax Evasion be investigated?
A tax investigation will often start with an enquiry into the previous year’s tax return. If they find innocent errors they can go back up to 4 years. If the HMRC suspect the more serious nature of tax evasion, their investigation can go as far back as 20 years.
What to do if you being Investigated for Tax Evasion
Whether you have committed tax evasion or have been unfairly accused by HMRC, you NEED to manage your approach carefully. It is a serious offence that could land you in prison. HMRC now have greater powers to seek information about your financial affairs than they have ever had before, they have geared up their prosecution department, employing more barristers and solicitors to pursue evaders. You need somebody to fight your corner and to ensure you are treated fairly by HMRC inspectors during the course of any investigation. HMRC can ‘name and shame’ taxpayers who have committed offences greater than £25,000.
Criminal prosecution is being increased enormously due to the Revenue and Customs Prosecutions Office being incorporated with the Crown Prosecution Services. The Taxman is no longer interested in getting the money, they want prosecutions, the convictions AND the money.
If you are criminally prosecuted for evasion you don’t escape paying the tax, you will be chased for it. You may be prosecuted under the Proceeds of Crime Act 2002 and the Money Laundering Act 2007. If you are convicted of money laundering, all of your possessions – including your house, your cars, your boat, whatever – can be confiscated.
Taking Control of your Investigation
Evading your taxes is a very, very serious offence, which must not be underestimated. The average prison sentence in the UK was two years and seven months in 2018/2019. If you have been accused of evading your taxes, we strongly recommend that you act quickly, with professional, experienced help. Inexperience can cause you to end up in more serious trouble.
We are one of the foremost experts in this field, dealing with civil and criminal prosecutions by HMRC. We are non-judgmental and will take your investigation in hand. Most importantly, we know how to negotiate with HMRC.
Only a small percentage of cases result in a criminal tax investigation but it is a possible outcome. Criminal tax investigations depend on your willingness to co-operate with HMRC and the severity of the case. HMRC tax investigations for tax evasion usually result in a financial settlement, often including interest and tax evasion penalties. These can be up to 200% of the tax owed. Professional representation during your tax evasion investigation is essential and will considerably reduce your penalty.
Tax investigations are carried out by the following HMRC departments:
HMRC evasion investigations are not something that can be dealt with on your own. Give yourself the best possible chance of a fair settlement and call KinsellaTax the moment you receive an investigation letter from HMRC.
Take Action to Regain your Peace of Mind
If you have been accused, don’t waste time burying your head in the sand, deal with it now, and rest your head on the pillow.
No matter what your situation is, after speaking with KinsellaTax, you will sleep better knowing that we are in your corner, supporting you and helping you to achieve the best outcome.
Seek advice from us now before your affairs get out of hand. What are you waiting for? Call us now. You don’t have to give your name or number – we’re here to help you.
You can call us on 0800 471 4546.
KinsellaTax has acted for many clients accused of tax evasion and are here to help you.
We are here for you 24 hours a day, 7 days a week on 0800 471 4546. Call anytime to speak with one of our dedicated tax investigation experts.