There are different types of offences relating to tax fraud, including:
- Tax evasion - is the deliberate, dishonest non-payment of tax owed.
- VAT fraud - the failure to charge and account for VAT when required, or VAT is charged but not paid over to the tax authority
- Cheating the public revenue (where someone has made a false statement with the intention of defrauding the tax authority); and
- Corporate criminal tax offence, which is the failure to prevent facilitation of tax evasion.
No.
The tax authority will choose either to issue criminal penalties or civil penalties. Some behavior (deliberate and concealed) could meet the conditions for criminal penalties or civil penalties. The tax authority encourages disclosure and will often issue civil penalties instead of criminal because the burden of proof is lower for the civil regime.
Strict liability offences do not require intention. But for most of the tax related crimes, criminal intention is required… but this can include "turning a blind eye" recklessness.
If a taxpayer discloses an error to the authorities, it is less likely that criminal proceedings would be instigated, but it depends on all of the circumstances.
In practice no. The police or tax authority will present the file to the prosecutor. It will be for the prosecutor to decide whether to pursue the case.
This is a complex area with different rules applying to different types of offences. For the most serious crimes (referred to as "indictable"… i.e., when a person is subject to a jury trial, the starting point is that there is no time limit.
This is a complex area with different rules applying to different types of offences. In some cases, proceedings ought to be started within six months of the criminal act that is being complained of.
A range. The most serious crime is cheating the public revenue, for which the sentence could be up to life imprisonment.
Yes, in relation to the CCO, it is a defence for taxpayer to prove that when the tax evasion occurred, it had reasonable procedures in place to prevent the facilitation.
Yes, there are various self-disclosure regimes. In some cases, HMRC will agree to immunity for prosecution if the taxpayer enters a contractual disclosure facility.
No, but this could be relevant when the prosecutor considers whether a prosecution is in the public interest, and this point could also be relevant on sentencing.
No, The statutory requirements are not altered by a prosecution.
Yes.
Yes, see answer to Question 11. In addition, like any crime, the accused can enter a guilty plea, which will be taken into account on sentencing.
Both.
See the answer to Question 16 - both individuals and corporates can be prosecuted for the same crime.
For corporates, the offence must be capable of being punished by a fine, and the blame must be attributable to the company (e.g., vicarious liability of acts by employees, or identifying a directing mind of the company).
Not really. There is a greater focus by the tax authority to check taxpayer's reasonable procedures to prevent facilitation, but the bar for criminal prosecution is high and we have not seen an increase of prosecutions among our client base.