HM Revenue and Customs (HMRC) is currently investigating 153 individuals for enabling tax evasion, according to international law firm RPC.
The law firm believes the number is likely to grow as the taxman has been given additional resources to recruit more staff within is Fraud Investigation Service.
Those under investigation includes tax advisers and other intermediaries. The word ‘enablers’ encompasses many different financial services professionals, including wealth managers and tech companies providing software that can be misused to distort profits.
According to the law firm, there are two categories of enablers: those who knowingly aid people to evade tax, and those who may not be aware their clients are involved in criminal activities but failed to carry out proper due diligence and risk assessments.
Tax authorities have improved their methods when it comes to tackling traditional tax evasion, but criminals are becoming increasingly dependent on the help from enablers, RPC added.
Their role usually focuses on moving assets between jurisdictions, setting up offshore structures, concealing beneficial ownership, and devising arrangements to minimise profits.
Criminal powers
Adam Craggs, head of tax disputes and partner at RPC, said: “HMRC is determined to clamp down hard on anyone who aids in tax crimes, not just the perpetrator themselves.
“The Revenue has been effective in identifying traditional tax evasion, with the result that would-be evaders are becoming more sophisticated and are increasingly turning to third parties to assist them.”
Michelle Sloane, partner at RPC, added: “HMRC has broadened its focus considerably and is now coming after a wide range of enablers who it considers are complicit in tax evasion.
“This includes software developers and even those who operate storage facilities that could be used to hide high-value goods. If you are in any way assisting clients evade tax, HMRC may use its criminal powers against you.”
An HMRC spokesperson told International Adviser: “We are increasingly looking to tackle those professionals who help facilitate tax crime, with around 150 such enablers under criminal investigation. In addition, the Corporate Criminal Offence, introduced in 2017, makes it a criminal offence for an organisation to fail to prevent someone acting on their behalf from criminally facilitating tax evasion. We’re already seeing organisations put in place preventive procedures to limit the opportunity for criminal facilitation to take place which is really what we want to see.
“We work closely with our international partners, including the Joint Chiefs of Global Tax Enforcement (J5), to investigate sophisticated international enablers of tax evasion and their intermediaries who facilitate taxpayers to hide their income and assets.”
