HMRC crackdown leads to nearly 700 convictions

Thursday 2 January 2014

Despite accusations that HM Revenue and Customs (HMRC) isn't living up to its promise to be tough on tax, official figures have shown that there were almost 700 tax fraudsters and benefit cheats convicted in 2013 as a result of investigations by the government body.

Between January and the end of November there were 690 successful convictions. This is up considerably from the 477 recorded in 2012 and the highest noted since the 2010 Spending review.

The convictions equate to a total combined prison sentence of 355, resulting from investigations into complex VAT, income tax, benefit fraud and even smuggling cases.

Coinciding with the release of the figures, HMRC has published the top five tax cheat prosecutions of 2013. The cases in question have a net prison sentence of over 75 years.

Exchequer secretary to the Treasury David Gauke said: "The government is determined to make sure people pay the tax they owe and HMRC will come down hard on those who try to cheat the system. Honest taxpayers will be pleased that these fraudsters are now paying for their crimes.

"We have invested nearly £1 billion in HMRC to tackle those who fail to play by the rules, and today’s figures clearly demonstrate that investment is paying off."

Director for criminal investigations at HMRC, Donald Toon, added that the convictions send a clear message to tax avoiders.

"We are well on track to achieving our spending review commitment to increase the annual number of prosecutions to over 1,000 by 2014 to 2015," he said. "The vast majority of people are honest with their tax affairs, but if anyone knows of somebody evading their taxes they should call HMRC and tell us."

Nevertheless, criticism has been levelled at the body lately, with a committee of MPs claiming HMRC largely pursues easier targets, such as limited companies, when conducting investigations.

Margaret Hodge, chair of the Public Accounts Committee, said the UK tax body needs to step up its game when it comes to tax avoidance by larger firms.

HMRC is accused of failing to use the full range of sanctions at its disposal and neglecting to take action in mounting prosecutions against multinational companies.

Ms Hodge claims that in tax avoidance cases including Google, Starbucks, Amazon and Vodafone, HMRC "lost its nerve". Consequently, the UK lost out on £35 billion.

However, HMRC has vehemently denied the allegations. In a statement, the body declared that it works to collect the tax due from all taxpayers to ensure everyone pays their fair share in accordance with the law.

HMRC added that the findings of the Select Committee were "selective and misleading", with MPs choosing to highlight figures that show an increase in money that has not been collected, opposed to those depicting the percentage of uncollected tax. This number has decreased between 2012 and 2013, according to the government department.

During 2013, HMRC collected £475.6 billion in revenue - an increase from £1.4 billion in 2012.

"We have secured more than £50 billion of additional tax from our compliance work since 2010, including £23 billion from large businesses," a spokesperson from HMRC said.


By Victoria McDonnell

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