Jump in serious tax evasion cases for HMRC
HMRC referred 3,000 suspected instances of tax evasion for specialist investigation between 2015/16, Pinsent Masons has revealed
HMRC experienced an 8% increase in serious tax evasion cases for 2015/16, as the government department referred an additional 3,000 suspected instances for specialist investigation, research from law firm Pinsent Masons has revealed.
The law firm suggested that the figures represent how HMRC is under “continued political pressure” to clamp down on aggressive tax avoidance and evasion.
Following the furore around the Swiss HSBC and Panama papers scandal, Pinsent Masons predicts that HMRC will be keen to be seen to step up its enforcement activity.
Fiona Fernie, partner at Pinsent Masons, explained that the government department is “very alive” about tackling on-shore and off-shore tax evasion, but admitted that the “battle is far from over.”
“Headline-hitting exposés like the Panama Papers leak and the HSBC Swiss banking scandal highlight that sheltering wealth from the taxman, remains an extremely highly-charged issue. This is exacerbated by the apparent blurring of the lines between avoidance and evasion and the fact that many individuals seem to assume that any type of tax structuring which involves off-shore is automatically illegal.
“HMRC now has more weapons in its arsenal to help it hit increasingly exacting enforcement targets. There is no question that it is prepared to use them to powerful effect to clamp down on wrongdoing and maximise the deterrent value,” continued Fernie, who said that HMRC is likely to be more favourable to those who come forward of their own will.
In the 2015 summer Budget, HMRC was granted an extra £800m to invest in compliance and tax evasion, in the hope it will recover £7.2bn in unpaid tax by the start of the next decade.
Pinsent Masons predicts that the increased budget will increase the number of criminal prosecutions into serious and complex tax crime triple, as well create a surge in the number of prosecutions to 100 per year within five years.
HMRC has previously said that offshore investigators in its Fraud Investigation Service are currently investigating over 1,100 cases of offshore evasion worldwide, with more than 90 individuals under criminal investigation.