Criminal prosecutions for tax evasion have soared over the past year, rising by nearly 60 per cent on the back of increased resources and a policy of targeting the self-employed and smaller businesses.
Figures released today show that Revenue & Customs easily exceeded its target in the past year, with 1,258 individuals convicted of tax evasion, some 463 more than the previous year. The Revenue’s conviction target for last year was 1,165.
“With numbers of criminal tax evasion prosecutions soaring, the prospect of a prison sentence or a criminal record is a very real possibility for growing numbers of offenders,” said Morag Rea, of the research group at Thomson Reuters, which analysed the figures.
Specialist lawyers told The Times that a combination of factors has triggered the dramatic rise in prosecutions. Two years ago, Keir Starmer, QC, director of public prosecutions at the time, signalled in a speech that officials wanted to crack down on evasion. And the research coincides with suggestions that the taxman is aggressively accusing high street accountants of evasive tactics.
In a 2013 speech, Starmer, who is now a Labour MP, said:
“Let me be clear and firm. A scheme might be devised by an experienced, but corrupt, tax professional. It may be clever and complex. And it may seem to offer easy wins. But no scheme is too clever or complex to be detected, to be put before a jury and to be found to be illegal.”
More resources were allocated to the HMRC prosecution team bringing in young lawyers who want to chase what they consider to be tax evaders. A decision taken to go for “low hanging fruit”.
More staff and money were allocated to prosecuting small time evasion and relatively easy prosecutions involving non-organised evasions committed by plumbers, decorators and other small businesses. Rather like putting notches on the gun belts.
HMRC also focused increased attention on “marketed avoidance schemes”, complicated investment packages that are designed to dodge UK tax. Whereas the prosecutors used to target the promoters of those schemes, they are now going for the individual investors themselves.
There are some criminal prosecutions underway at the present time but all this is to counter criticism of the British tax authorities, and government of course, that they are not doing enough to crack down on deliberate fraudulent abuse.
Kevin Kinsella Jnr of KinsellaTax says:
“There is more pressure upon private individuals with criminal tax investigations. Cases previously suited for civil settlement but now chosen for criminal prosecution. There is a very narrow line between civil and criminal demeanour.”