In recent years there has been an increase in the amount of HMRC investigations which have been conducted on either a criminal or civil basis. If HMRC becomes aware that you have deliberately avoided paying tax, then there is always a chance that you will find yourself the subject of a criminal investigation. This can ultimately result in prosecution and a prison sentence. However, even with deliberate tax avoidance, there are circumstances where HMRC chooses to either, on its own volition or when a request is made, to it settle matters without the need for going to court.
This means that the underpayment of tax (deliberate or not) is often punished with a penalty and interest based on the amount of underpaid tax and the extent of the actions taken to avoid paying it. There are various different types of Disclosure Protocol (or Codes of Practice) which HMRC use when seeking a resolution on a civil basis, including one which provides an indemnity against prosecution if the correct criteria is met and full co-operation and disclosure is subsequently provided.
However, a criminal investigation is a real risk for anyone who has tax irregularities and finds themselves under the scrutiny of HMRC. There is potential for any tax investigation case to go to the courts, with a potential prison sentence awaiting at the end of the process.
In recent years, the number of tax evasion cases that have resulted in a prison sentence has increased, although the average jail sentence has decreased. This is an indication that HMRC is no longer restricting criminal prosecution to ‘celebrity’ cases and that regular earners are at risk of their investigation resulting in a prison sentence.
So if you know of an irregularity in your tax affairs and you do not know how to resolve it, or you are worried that you may be investigated or find yourself the subject of a tax investigation or prosecution, then it is vital that you receive expert advice as to how best to navigate your way out of trouble. It is strongly recommended that you consult a specialist tax lawyer as soon as possible. You can have a confidential initial consultation for free with our expert solicitors if you want to discuss your situation. Get in touch with us today.