The prison term for tax evaders who have been convicted has jumped 42% in the past 12 months, from 185 to 262 years in prison, as HMRC cracks down on its approach to alleged tax avoidance.
According to Pinsent Masons, decisions to increase the charge for individual taxpayers suspected of tax evasion increased by 11% over the past year, from 304 to 336. Overall, 134 taxation decisions were taken in the fourth quarter of 2021/22 compared to 85 in the third quarter, an increase of 58%.
In addition, the length of custodial sentences handed down by the courts has also increased. There was a 131% increase in the total length of custodial sentences in the fourth quarter tax year 2021/22, with tax evaders collectively sentenced to 125 years in prison, up from 54 years in the third trimester.
Andrew Sackey, partner at Pinsent Masons, said: “There is clearly a need for the Treasury to balance expenditure arising from Covid and the war in Ukraine. HMRC’s strategy has been to use criminal powers only in the most serious cases; although it has always acknowledged that the deterrent impact of targeted lawsuits is part of its arsenal.
“These figures demonstrate that he wants to show he is serious about ‘persuading’ better tax compliance, and is increasingly seeking to bring charges against those suspected of tax evasion – whoever they are – to back this up. message.”
He added: “The overall message couldn’t be clearer. Anyone who evades tax can – and increasingly will – find themselves in the crosshairs of HMRC and will therefore have to endure the stress, disruption and reputational damage of a criminal investigation and well Of course, if found guilty, she could well end up behind bars.