Tax evasion is the illegal evasion of taxes properly due, usually demonstrated by a dishonest intention to avoid accounting for and paying taxes due on an individual or business’ income.
In the UK, tax evasion is a criminal offence and may lead to Code 9 investigations and, ultimately, prosecution with sentences up to 7 years for most offences.
- tax evasion, as opposed to tax avoidance, does not always seek to rely on an alleged legitimate tax scheme for the purpose of minimising or eliminating the tax liability that would otherwise be payable;
- one of the most common forms of tax evasion is the smuggling of goods that otherwise could be sold in the UK, solely for the purpose of avoiding import duties.
Where tax evasion is shown to exist, it is in the public interest for HMRC to ensure that it is dealt with quickly and this will almost always lead to
- seizing goods;
- public interest winding-up petitions;
- the institution of criminal proceedings;
- demands (with penalties, interest and surcharges) of the taxes due and payable.
For those evading tax, the penalties that can be imposed upon prosecution for most offences are quite severe. The court can impose a prison sentence of up to 7 years for most offences and for cheating HMRC by deliberately providing false information or records, the court has the power to impose a maximum custodial sentence and an unlimited fine.
At Francis Wilks & Jones we have considerable experience of negotiations with HMRC, including accelerated payment notices, personal liability notices, VAT Security appeals to tax tribunals and insolvency claims by liquidators. Please call any member of our tax disputes team for assistance. Don’t settle for second best.