There has been a jump from 617 prosecutions in 2012/13 to 795 in 2013/14, an increase of almost 29%.
However, a target of 1165 prosecutions for 2014/15 has been set by HMRC, which means a single year will have to see a 50% surge in prosecutions in order to meet the goal.
Thomson Reuters legal business said that the increased focus on prosecuting tax evaders has been bolstered by the introduction of a new criminal offence for taxpayers who fail to declare offshore income or gains.
Unlike the existing regulations where HMRC must prove a person’s intention to evade tax, the fresh plans mean that the body will only need to show that the money held offshore was taxable and undeclared.
“Not just an idle threat”
Emma Nendick, head of tax at the Practical Law service, and also part of Thomson Reuters, said: “Criminal records and prison sentences are not just an idle threat.
“In fact the increasing volume of criminal prosecutions is one of the measures by which HMRC now judges its success.”
She also said that criminal prosecutions have a “useful deterrent effect”, not just for tax evaders, but for those involved in tax avoidance schemes.
Nendick advises that criminal prosecution can arise from circumstances of tax avoidance if false statements or documents are produced during a civil investigation, or if it is suspected there has been deliberate deception, concealment, conspiracy or corruption.
The increase in prosecution targets and investigations into tax planning schemes has created a trend for more contentious tax work, according to Thomson Reuters.
