Save content
Have you found this content useful? Use the button above to save it to your profile.
AIA

All in it together

by
17th Jul 2012
Save content
Have you found this content useful? Use the button above to save it to your profile.

Of late there seems to have been rather more news about people being sent to prison for tax evasion than normal, possibly marking a real increase in HMRC’s activity in this area, says Simon Sweetman.

In general, we are slow to put people away for tax offences in this country, because, well, they’re not really the sort of people you send to prison (and because HMRC finds it difficult to convict the sort of people whose imprisonment might send a message). Many other countries are less reluctant to reach for this weapon: in the USA the rapper Beanie Sigel has just been sent down for two years, and Wesley Snipes was given three years in December 2010. Lauryn Hill is facing up to three years after pleading guilty last moth.

Al Capone, as everyone knows, went to prison for tax evasion because they couldn’t get him for anything else. But in most cases prison for tax offences is overwhelmingly intended as a warning to others, rather than retribution (and the notion of prison as a place where people may be reformed, rather than taught new and interesting criminal practices, seems long ago to have vanished from the British penal system).

HMRC lately reported that a property developer, who closed a secret Swiss bank account in an effort to avoid detection, has pleaded guilty and been ordered to pay fines and compensation totalling £830,000 plus costs at Wood Green Crown court.

A young woman who worked as an escort has been sent to prison for 16 months for evading tax on £300,000.

In January a former accountant was ordered to pay back £2,462,175 following conviction for tax fraud.

In March a plumber was sent to prison for 12 months for evading £91,000 over 12 years.

But in the middle of all this - bizarrely - higher rate taxpayers who have been issued with tax returns and not completed them are being offered a chance to do so at a reduced penalty – even though HMRC knows who they are and although the recent Bartram case makes it clear that in such cases HMRC can make a determination which has the same legal force as a Self Assessment. I can understand a partial amnesty being offered to those who might otherwise get away with it, but that is not the case here. Just what is going on?

Now it is not easy for HMRC to get convictions. Juries don’t love them. Especially if the accused comes over as charming or even winsomely feckless, they tend to get a very considerable benefit of the doubt.

Replies (9)

Please login or register to join the discussion.

avatar
By Roland195
17th Jul 2012 12:59

Expensive Lawyers

Can anyone explain why the hooker & the plumber are being jailed for comparatively trivial sums ?

I was going to suggest the benefit of expensive lawyers but the escort could likely afford one of the best (indeed, they probably have similiar hourly rates - I will stop the hooker/lawyer jokes here as they would take a forum of their own and would be in bad taste). 

Thanks (1)
Replying to Mikolaj:
avatar
By AddsUP2Me
17th Jul 2012 15:02

Could it be zero compliance that got them jailed Roland?

Roland195 wrote:

Can anyone explain why the hooker & the plumber are being jailed for comparatively trivial sums ?

I was going to suggest the benefit of expensive lawyers but the escort could likely afford one of the best (indeed, they probably have similiar hourly rates - I will stop the hooker/lawyer jokes here as they would take a forum of their own and would be in bad taste). 

 

Is the deciding factor that they paid absolutely no tax on their earnings, whereas others were compliant in some areas of their affairs and not in others? I may be wrong in thinking that both the plumber and call-girl stayed completely outside the formal economy and declared none of their work. Also the call-girl had other circumstances of interest to the police.

A Hertfordshire man was jailed for 15 months this July for failing to pay tax and national insurance on £1 million he earned over an 11 year period. Again he appears to have paid no tax on earnings from his railway planning limited company whatsoever. Transport police were involved. He forged documents.

I wonder how many people are jailed per year for tax evasion outside the serious stuff. By that I mean when it is not a 'serious' crime such as VAT carousel fraud; not cigarette smuggling; not linked to other crimes such as drug dealing; not committed by gangs conspiring; and when not by a policeman/solicitor/accountant/etc.?

HMRC press releases seem to identify mostly bigger scale frauds and greater betrayals of professional trust.

Thanks (0)
avatar
By Cynical_Templar
18th Jul 2012 07:09

Good to genuineh evasion dealt with but....
HMRC's web page which gives details of the evasion hotline invites people to shop those "not paying their fair share of tax" this gives an inaccurate view of what evasion is.

If HMRC and the Government continue to seek to blur the line between evasion and avoidance they will only alienate the business community further.

Thanks (0)
avatar
By Philip Espin
19th Jul 2012 08:37

Missing the point

The hooker case is an interesting one as according to press reports it was taken by the police and there is no press release on the HMRC website.  She was arrested in November 2011 and the case was brought to trial in just over 6 months.

What this says to me is that the police can prosecute simple tax fraud much more expeditiously than HMRC can.  It usually takes HMRC a couple of years at least.  No wonder they are keeping quiet about it.  So no, I don't see much sign of HMRC improving their act just yet.

Maybe they should get the police involved more frequently.  Raid the home of a few banksters and find their undeclared tax haven bank accounts, its nice when the job is done properly.

If I'm wrong on this no doubt HMRC can publish statistics to prove it.

 

Thanks (2)
avatar
By Simon Sweetman
19th Jul 2012 09:47

a plea from the author

There are plenty of English words for those who practice the oldest profession (not accountancy this time). So can we please do without the American "hooker" ?

Thanks (1)
avatar
By Philip Espin
19th Jul 2012 10:53

American words

How about "popular singer" rather than rapper?

Thanks (1)
avatar
By Simon Sweetman
20th Jul 2012 12:17

pedantry (and why not)

I would say that a rapper is a particular type of singer (as in "crooner") and I only think "hooker" sound innocuous because we don't use it !

Thanks (0)
Replying to MattBailey:
avatar
By Roland195
20th Jul 2012 15:16

So what is your alternative?

oldersimon wrote:

I only think "hooker" sound innocuous because we don't use it !

Lady of the night?

 

Thanks (1)
avatar
By leon0001
20th Jul 2012 12:50

Words & music

1. Rappers don't sing, they read poetry.

2. Where does it say that the escort plays rugby?

Thanks (0)