The London-headquartered law firm said the number of prosecutions relating to tax fraud climbed to 240 last year from 157 the year before and is “evidence of the impact the organisation’s recent aggressive and increased tax compliance activity are having”.
Jason Collins, head of tax at the international law firm, said: “HMRC has been using the £900m in extra funding for tax avoidance and evasion work announced in 2010 to increase the number of criminal investigations it opens and the speed with which it gets cases to the Crown Prosecution Service.
“HMRC has adopted a very aggressive stance towards 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.”
Pinsent Masons said it also found the number of arrests made by HMRC in relation to tax fraud increased by 7% to 151 last year, up from 141 the year before. Convictions were also up marginally, increasing by 4% to 154 last year from 148 the year before.
However, rather than focusing on increasing arrests and convictions, Pinsent Masons said HMRC should invest more in improving civil procedures, such as the Liechtenstein Disclosure Facility.
“Civil procedures and amnesties can be a very cost effective way to boost tax yields,” said Collins.
“The LDF 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.”
