The number of arrests, dawn raids and interviews undertaken in respect of corporates and high net worth individuals by HM Revenue and Customs’ (HMRC) elite offshore, corporate and wealthy (OCW) unit jumped last year to 70, according to law firm Pinsent Masons.
This was up 40% from 50 in 2018/19.
Investigations by the unit resulted in charges being brought in 85 cases last financial year, up from 34 cases in 2018/19.
Pinsent Masons says the unit was established at the time of the Panama Papers scandal in April 2016 and it uses criminal and civil powers to investigate suspicions of serious non-compliance by companies and the wealthiest taxpayers.
Since it was established, the OCW unit has collected or protected £1.8bn ($2.4bn, €2bn) in extra tax through its investigations. The 2019/20 tax yield alone was £414m.
‘Found its feet’
Andrew Sackey, partner at Pinsent Masons and former head of the OCW unit, said: “The offshore, corporate and wealthy unit has a simple, highly focused aim – to target deliberate non-compliance by corporates, the wealthy and ultra-high net worth individuals who seek to evade tax.
“The unit has really found its feet in recent years. Due to the complexity of the cases it investigates, it can take time for criminal cases to reach the public domain of the prosecution stage.
“The increase in charging decisions demonstrates that the unit’s early work is now starting to pay off.”
Threshold test
Pinsent Masons said that HMRC decides whether to launch criminal investigations based on three key factors:
- The severity of the misconduct or tax loss in the case;
- Whether a strong deterrent message to other taxpayers is merited; or
- If civil investigation powers would not be successful in bringing adequate enforcement action.
Sackey added: “HMRC has been dedicating more and more resources to the investigation of corporates and wealthy taxpayers since the Panama Papers scandal.
“HMRC investigations into the wealthiest and most sophisticated suspected offenders have increased eight-fold from about 50 in 2016/17 to over 400 in 2019/20.
“It recently announced that 31 companies are under investigation or enquiry in respect of suspicions relating to the Corporate Criminal Offence.”
