Tuesday 26 February 2013

HMRC's Looney Toon

I was surprised and disturbed to read yesterday that Donald Toon, director of criminal investigation at HMRC, has told wealthy professionals they will be “caught and dealt with” if they "avoid" tax.

To use such threatening language over tax avoidance (not evasion) seems somewhat extreme, does Toon not know that avoidance is legal or did he "mis-speak"?

To further compound the confusion Toon then went on to highlight the forthcoming sentencing of London barrister, Rohan Pershad, who failed to pay more than £600,000 in VAT.

Toon was quoted by Economia:
The case will have a direct impact.

That no matter your professional status, you can face criminal investigation and prosecution."
Fair enough, except that the case referred to relates to evasion not avoidance.

He then had a go at those lawyers, doctors and accountants who he accused of “arrogantly” believing that HMRC would not take criminal action against them if they avoided paying tax.

Was Toon misquoted, or was he really directing his comments at tax avoiders?


HMRC contend that this was a misrepresentation.

Tax does have to be taxing.

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  1. Toon was quoted by Economia:

    “The case will have a direct impact.

    That no matter your professional status, you can face criminal investigation and prosecution."

    Its a pity that it does not apply to their own hypocritical law breakers.
    Their internal grievance process works within line management streams so that if you appeal a decision the decision makers line manager is the appeal manager!
    No chance of a conflict of interest covering an allegation of law breaking then? (irrespective of whether its criminal or civil law or both that they are alleged to have broken)

  2. “The case will have a direct impact.

    That no matter your professional status, you can face criminal investigation and prosecution."

    Go tell it to the birds Toon. The day I see the MP's, Lords and Ladies, and indeed ex-employees of HMRC (ex private sector, I have been told names but do not have evidence) locked up for tax evasion I will believe it. Why not start with the thousands with undeclared income in Swiss banks. Oh no you let those CRIMINALS off while threatening tax avoiders who have acted within the law. We need a high profile whistleblower in HMRC - someone who knows where the many skeletons are hidden. It would collapse like a house of cards. Mind you I think it would bring government down with it. Bring it on.

  3. If you thought that lot in HMC&E responsible for such farces as the London City Bond, Operation Stealer, Operation Teak et.al. or Dave Hartnett & Co in the IR vs. Ken Dodd farce, were equally as bad, then you will be ssurprised when the truth about HMRC as they now are spews out!
    What has gone on and been reported since the forming of HMRC is nothing compared to what is lurking within.
    They have a complete and utter disregard for the law of the land and work on the advised priciple of carry on regardless and if we are caught we use public money to defend, at all costs including settlements.
    It would be entertaining and satisying to see a QC of Michael Mansfields' ability up against them. It would be carnage for HMRC epecially if the PCS got off its rear and opened up, but then tht needs character and strength in the face of adversity and thats lacking in PCS over the more difficult areas.

  4. Apologies for the length of this posting, but please persevere

    The sheer hypocrisy of this statement (Toon's) is deeply troubling but I struggled to find anything to support mine and others feelings until:-

    From:- http://www.hmic.gov.uk/publication/hmrcs-management-of-internal-fraud-and-corruption/

    HMRC’s management of internal fraud and corruption

    An anti-corruption strategy that relies primarily on reacting to activity which happens to come to light is unlikely to be fully effective in identifying the extent of the risk facing an organisation, and in providing a deterrent to potential wrongdoing. A proactive approach offers benefits to organisations in that it allows them to take charge of situations through anticipating what might happen. It could be described as ‘acting in advance’ rather than waiting for something to occur and reacting to it. The proactive search for evidence of wrongdoing and effectively dealing with it when it is found, coupled with marketing of success in terms of sanctions against wrongdoers, should act as a deterrent to misconduct and criminal activity by staff.

    Areas for improvement

    The use of social networking media by staff presents challenges to organisations, both in the public and private sectors. A member of HMRC staff who openly identifies him or herself as an HMRC employee could create a vulnerability which may be exploited. HMRC has a policy in place on employee use of social media sites. However, to understand the risk that such activity poses to the organisation, the commissioning of proactive open source research will serve to identify the vulnerability of staff to exploitation.

    Where there is sufficient intelligence that a person poses a risk to the organisation through criminality or inappropriate behaviour, which either for reasons of confidentiality or insufficient evidence cannot lead to prosecution or misconduct proceedings, there is no system within HMRC to remove the individual from the area of risk, whilst retaining them as an employee. Where an organisation has, for good reason, lost confidence in a member of staff, it would benefit the person concerned, those who work alongside him or her and the organisation to have a recognised process through which the risk can be mitigated, either by way of redeployment, restrictions upon duties or other means

    There is no one place within HMRC where data such as sickness levels, misconduct cases, security incidents, reports of arrest or other lifestyle information on individual members of staff is held. IG is therefore unsighted on these issues, unless they ask a specific question. A new, more functional IG intelligence database may present an opportunity to address this shortcoming and help to develop the profiling of staff who pose a risk to HMRC.

    Now, for an organisation made up of constituent parts that were responsible for such failures as the Ken Dodd prosecution (Dave Hartnett & someone to do with the Leveson inquiry?), the London City Bond fiasco. operations Teak and Teak (all open source info.)
    you might think they were all above board as HMRC.

    Hypothetical situation:-
    A manager known to be a bully with a record of appalling staff mistreatment and proven cases against him/her, who had caused a potential risk by social network "naievty" and who had several recent records of complaints and grievances against him/her with a trail of staff suffering from stress abscences and transfer out or resignation is in the evidential chain, also other managers are accused of criminal and/or civil law breaking...
    Now that's a hypothetical situation to chew on isn't it?

    That really would need looking at, independantly, if it were true.

    And the difference between hypothetical and reality - the above sentance, that's all.

  5. Were I the powers that be I think I would be asking a few quetions based on the previous 4 posts.
    If only a quarter is true I would be very concerned but somehow I get the impression something is deeply wrong in there and the real figure is a lot higher.

  6. Ken,

    I hate to drag this entertaining comment thread back on to topic, but did Toon actually use the A word or was it the journalist? As far as I can see, none of the uses of these words in the Economia article are within speech marks.

    In fact, in the first article you've linked to, he does refer to evasion (in speech marks). All terribly confusing.

    Stew G

    1. Economia tell me that they took the quote of "avoidance" from the Times.

    2. So you'll be checking with the Times where they got it from, then?


    3. I did that before posting the article, and also after posting the article (by copying it to them), if I receive a response I will post it.

  7. The thread appears to be hinting at "whats good for the goose..." besides a few other things.