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Tax prosecutions drops sharply.

 

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The tax author­ity has only pro­sec­uted eight cases in the last two years for enabling eva­sion, des­pite pledging to aggress­ively pur­sue the law­yers, account­ants and fin­an­cial insti­tu­tions that help cli­ents carry out tax fraud.

Instead, there has been a steep drop from the 43 pro­sec­u­tions brought by HM Rev­enue and Cus­toms in the two years before the Covid-19 pan­demic, accord­ing to a response to a free­dom of inform­a­tion request sub­mit­ted by the Fin­an­cial Times.

«The gov­ern­ment’s rhet­oric on crack­ing down on tax eva­sion, aggress­ive avoid­ance schemes and those who pro­mote them is essen­tially not being fol­lowed through by HMRC,» said Nimesh Shah, chief exec­ut­ive at the account­ing firm Blick Rothen­berg.

A report by the National Audit Office, par­lia­ment’s spend­ing watch­dog, in Decem­ber revealed that a sharp fall in invest­ig­a­tions over the pan­demic had cost the gov­ern­ment as much as £9bn.

The over­all tax gap in the UK — the estim­ated dif­fer­ence between tax owed and tax paid — was about £32bn in 2020-21, the latest year for which data is avail­able.

Simon York, HMRC’s head of ser­i­ous fraud, told the Fin­an­cial Times in Janu­ary that the agency was intent on pur­su­ing the fin­an­cial and pro­fes­sional ser­vices firms that facil­it­ated tax eva­sion as well as evaders them­selves, not­ing that this required more col­lab­or­a­tion with inter­na­tional coun­ter­parts.

«The cur­rent low num­ber of pro­sec­u­tions nat­ur­ally means that these mat­ters are afforded less atten­tion than other mat­ters, which are per­ceived to be a greater risk,» said Nich­olas Gard­ner, part­ner at law firm Ashurst.

The free­dom of inform­a­tion request revealed that HMRC has 102 live invest­ig­a­tions into pro­fes­sional ena­blers of fraud, down from 153 in May 2021.

In 2017, the gov­ern­ment brought in new legis­la­tion, known as cor­por­ate crim­inal offences, which made it a crime for cor­por­a­tions to fail to put in place «reas­on­able pro­ced­ures» to pre­vent facil­it­a­tion of tax eva­sion.

www.sba.tax

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Comments

  1. Samantha6 March 2023 at 13:06

    Another example of we say one thing and do another. That's why we're in trouble in so many areas.

    ReplyDelete
    Replies
    1. William6 March 2023 at 14:07

      That's why we ended up voting whether or not we should exit the EU without knowing entirely what that would entail. We should have known the good, the bad and the ugly but most people didn't.

      Delete
  2. Jamal6 March 2023 at 15:12

    Unless the government actively invests time and effort into this, making it a priority, nothing will change.

    ReplyDelete

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