The Bureau of Investigative Journalism (TBIJ) and the Observer reported recently on the fall in HMRC’s civil investigations into tax fraud. According to figures obtained by the TBIJ via a freedom of information request, HMRC’s Fraud Investigation team followed up over 37,000 leads in 2018/19, but this had reduced to just over 21,000 in 2022/23. The data also reveals the number of civil cases taken by HMRC fell from 17,424 to 12,584 across the same period.
This follows previous reports by both organisations that HMRC investigations had led to the prosecution of just 11 wealthy individuals in 2022, and that HMRC had not charged a single company with the corporate offences of failing to prevent the facilitation of tax evasion under the Criminal Finances Act 2017.
Commenting on the findings, Nick Barnard, Partner at law firm Corker Binning, and who acted for Bernie Ecclestone in the criminal proceedings arising out of HMRC’s tax investigations, said: ‘In the last five years, HMRC has only amplified its rhetoric on addressing tax fraud. However, the numbers are stark on the reduction in new investigations, particularly in the Offshore, Corporate & Wealthy unit – even allowing for a Covid deficit. The number – zero – in respect of prosecutions for failure to prevent tax evasion is even starker.
‘HMRC’s response hints at other “compliance activities” but does not seem to be seriously suggesting that these are a substitute for the drop-off in new investigations. Assuming that the policy on pursuing serious tax fraud remains unchanged, then unfortunately the most likely explanation remains a lack of resources. Only when investigators can progress HMRC’s current caseload at a sufficient speed will there be capacity for more.’
The figures appear to contrast with previous reports of significant returns from HMRC’s compliance work into wealthy individuals and large corporates (see Tax Journal, Issue 1651).
The Bureau of Investigative Journalism (TBIJ) and the Observer reported recently on the fall in HMRC’s civil investigations into tax fraud. According to figures obtained by the TBIJ via a freedom of information request, HMRC’s Fraud Investigation team followed up over 37,000 leads in 2018/19, but this had reduced to just over 21,000 in 2022/23. The data also reveals the number of civil cases taken by HMRC fell from 17,424 to 12,584 across the same period.
This follows previous reports by both organisations that HMRC investigations had led to the prosecution of just 11 wealthy individuals in 2022, and that HMRC had not charged a single company with the corporate offences of failing to prevent the facilitation of tax evasion under the Criminal Finances Act 2017.
Commenting on the findings, Nick Barnard, Partner at law firm Corker Binning, and who acted for Bernie Ecclestone in the criminal proceedings arising out of HMRC’s tax investigations, said: ‘In the last five years, HMRC has only amplified its rhetoric on addressing tax fraud. However, the numbers are stark on the reduction in new investigations, particularly in the Offshore, Corporate & Wealthy unit – even allowing for a Covid deficit. The number – zero – in respect of prosecutions for failure to prevent tax evasion is even starker.
‘HMRC’s response hints at other “compliance activities” but does not seem to be seriously suggesting that these are a substitute for the drop-off in new investigations. Assuming that the policy on pursuing serious tax fraud remains unchanged, then unfortunately the most likely explanation remains a lack of resources. Only when investigators can progress HMRC’s current caseload at a sufficient speed will there be capacity for more.’
The figures appear to contrast with previous reports of significant returns from HMRC’s compliance work into wealthy individuals and large corporates (see Tax Journal, Issue 1651).
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