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HMRC fraud prosecutions soar

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22nd Apr 2013
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The number of individuals prosecuted by HMRC for tax fraud soared by 53% in the past year, according to Pinsent Masons.

With figures obtained via a freedom of information request, the law firm concluded that the increase showed the Revenue’s increased compliance efforts and more “aggressive” approach was beginning to bite.

The increase follows the Chancellor’s 2010 Budget commitment to give HMRC an extra £900m to counter tax avoidance and evasion.

According to the newly obtained data, HMRC launched prosecutions against 240 individuals last year, up from 157 the year before.

Arrests and convictions also increased during this period. Between 2009/10 and 2011/12, the number of arrests for tax fraud rose by 4%, from 105 to 151; the increase for 2011/12 was 7%, up from 141 in 2010/11. Convictions were up 4%, rising from 148 in 2010/11 to 154 in 2011/12.

Jason Collins, head of tax at Pinsent Masons, said HMRC has adopted a very aggressive stance when investigating individuals suspected of tax fraud.

“It is much more willing to opt for the criminal – as opposed to civil – investigative weapons in its arsenal. Arrests, prosecutions and property searches have all leapt since 2010,” he said.

Collins told AccountingWEB that HMRC's tax taskforces were driving some of this extra activity: “It’s one of the best ways of trying to find individuals who have engaged in tax evasion and in making a decision about whether to prosecute.”

The law firm urged HMRC to focus some of its funding on improving civil procedures for bringing in potentially missing taxes, rather than concentrating on criminal investigation activity alone. 

“Civil procedures and amnesties can be a very cost effective way to boost tax yields. The Liechtenstein Disclosure Facility is an effective ‘amnesty’ for dealing with tax evasion, but other options are limited, especially for individuals wanting to come clean with HMRC over legacy tax avoidance issues, particularly as some bought tax schemes when the climate for these things was very different,” Collins said.

An HMRC spokesman responded to the new data: “The government have given HMRC almost £1bn to tackle tax evasion, fraud and avoidance. HMRC are using this money to increase staffing in key teams, deliver an additional £20bn and increase criminal prosecutions for tax fraud five fold by the end of the 2015.

"The vast majority of taxpayers are honest and pay what they have to under the law, so it is only right that we tackle the small minority of cheats who deprive the country of vital revenues.”

Replies (5)

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By The Black Knight
29th Apr 2013 11:27

Why no publicity?

Why is there little or no publicity then?

Surely the whole point of a criminal prosecution is the setting of an example to support the deterrent?

 

"The vast majority of taxpayers are honest and pay what they have to under the law, so it is only right that we tackle the small minority of cheats who deprive the country of vital revenues.”

that's just plain Poppy [***]? A statement to support HMRC's failure?

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By Tromdo
29th Apr 2013 16:09

HMRC fraud prosecutions soar

Black Knight, you can't force the media to publish stories.  The PDD iniative hasn't hit the headlines either. Doesn't mean it doesn't exist!

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Replying to Ruddles:
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By The Black Knight
29th Apr 2013 16:22

I know BUT

Tromdo wrote:

Black Knight, you can't force the media to publish stories.  The PDD iniative hasn't hit the headlines either. Doesn't mean it doesn't exist!

They are not even on the HMRC website though? Not even as deliberate defaulters?

and carry out a google search ...yep just about nothing?

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By ian339
10th May 2013 10:31

Is that all?

So they've launched prosecutions against 240 people.

Out of how many taxpayers - 20m?

Is it just me, or do we seem to be an unbelievably honest bunch?

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Replying to SJRUK:
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By The Black Knight
10th May 2013 12:40

that's how they worked out that

ian339 wrote:

So they've launched prosecutions against 240 people.

Out of how many taxpayers - 20m?

Is it just me, or do we seem to be an unbelievably honest bunch?

That's how they worked out that most tax payers are honest and only a minority are naughty?

It's called spin? Any more prosecutions would ruin the statistics and make a politico look stupid.

Would also result in more work for HMRC and we can'[t be having that.

Quota reached! target achieved! cup of tea anyone? Strike for some more time off?

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