Recent articles in the Financial Times and the Telegraph report that HMRC have increased their yield from investigations into avoidance and evasion by one third to a record £21 billion. Such has been their success that the Treasury has further ordered that they increase that figure by an additional £7 billion by 2014-15.
So how are they doing this, bearing in mind that they have had their budget reduced by 25% and there has been an exodus of senior staff?
Who are they currently targeting and what should you do if HMRC come a-calling?
The current economic crisis has seen a huge change in approach from HMRC e.g. they have specialist elite units targeting various sectors and the wealthy; in short their answer to the SAS!
They use data mining programmes; an analysis programme called Connect; informants (particularly ex-spouses, business partners, whistle-blowers), they have increased their payments to informants by 21%; close inter-governmental agency file sharing; massive increase in property inspections (both domestic and commercial), and much improved international co-operation.
They have announced that they are going to increase criminal prosecutions to 1,500 per annum; in 2011-12 they prosecuted 545 individuals and secured 413 convictions. So far they have focused upon doctors, lawyers, traders, restaurateurs, landlords and the building industry.
We are currently advising individuals facing tax & VAT criminal investigations and prosecutions.
They have also turned their attention to the holders of off-shore accounts in Switzerland (Swiss HSBC) and more recently Jersey. They did successfully secure a conviction against one individual who had an account in Switzerland and, if reports are true about the activities of some of the HSBC Jersey account holders, others will surely follow.
Nobody can afford to be complacent about the Revenue’s intentions. If you have undeclared monies in an offshore account, disclose as early as you can with the help of a specialist accountant, avail, where possible, of the LDF which has been extended to 2016.
Generally, self-reporting (disclosure) and the payments of financial penalties would mean that a criminal prosecution is unlikely to follow. HOWEVER that may NOT be the case if criminal activity, money laundering or other POCA offences are suspected.
We are currently advising a number of individuals with offshore accounts who are facing criminal investigations both in the UK and abroad. So check with specialist solicitors such as ourselves before disclosure to ensure that you are fully advised about potential criminal proceedings.
If you require any advice please contact Jeffrey Lewis or Siobhain Egan at our head office on 020 7387 2032 or find out more at lewisnedas.co.uk.
