Wednesday 26 June 2013

Serious Tax Evasion Declines

It seems that despite the media and political narrative that tax evasion is rife, the number of cases of serious tax evasion (evasion in excess of £50K, or evasion that is worthy of prosecution) are at their lowest level in five years.

Those are the findings of a report commissioned by Pinsent Masons.

Between 1 April 2012 and 31 March 2013, local HMRC offices referred 2,888 suspected 'serious' cases to the central Evasion Referral Team, according to the figures. This was a substantial drop on the 3,456 cases identified the previous year, and the 4,506 cases identified in tax year 2010/11.
Phil Berwick, a partner at Pinsent Masons said:
"This decline in suspected tax evasion doesn't tally with the rhetoric from some quarters that the British economy is being undermined by a chronic under-collection of tax revenues.

HMRC has plenty of tools at its disposal to catch tax evaders which serves as a huge deterrent to those considering tax evasion.

International co-operation has been stepped up significantly as HMRC has striven to curb tax evasion.

Tax evaders are now realising that HMRC has a much greater ability to tackle evasion, even if individuals conceal their assets abroad.

Five years ago some individuals and businesses perhaps felt that evading tax was relatively easy. Now they can see that HMRC is much more proactive and better informed than in the past, increasingly they are deciding that tax evasion just isn't worth the risk."
Meanwhile the tax evasion hotline is booming.

Tax does have to be taxing.

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  1. it not considered opinion that tax evasion rises during a recession?

    I would want to look at whether there is a correlation between these figures and the ability of HMRC "ERT's" to progress said cases!

    It's a bit like their Criminal referrals exceeding the ability of the CI "bods" to handle cases without re-prioritising.

    Quart/Pint Pot springs to mind.

  2. Another suggestion might be that the structural changes to HMRC since the merger, especially the redundancy / retirement of experienced inspectors and the closure of regional offices has blunted HMRC's ability to detect the most common types of evasion, specifically backstreet and unregistered businesses.

    1. I must admit that both this and the 13:28 poster's suggestion crossed my mind when I read the original blog post.

      Stew G

  3. That went down the pan with the demise of the old C&E cash teams and unannounced visits.
    Then there is a certain community that rapidly went from selling pegs and posies to organised crime on a world wide scale encompassing the whole of the International Tax spectrum.
    Add an inability to see the wood fot the forest and Pacesetter/lean with a complete lack of direction and the lowest scores of any staff survey and what have you got?
    I give you The Muppet Show folks!

  4. @Anonymous:

    Your comparison of HMRC to The Muppet Show is an insult to Kermit, Miss Piggy and the rest.

    A closer comparison would be the apartheid era Bureau of State Security, a collection of incompetence and malevolence tied up in the niceties of a bureaucratic bow...

  5. B.O.S.S.? Never in a month of Sunday's!

    HMRC and EXCOM are populated by a combination of managers that are either megalomanics or those frightened of their own shadow.
    Extremes I accept, but unless you work in HMRC you would not have a clue as to how chaotic things are in there. More skeletons in the cupboard than an NHS Hospital (not nice but true on both counts!).