Number of serious tax evasion cases on the rise

The number of serious tax evasion cases has jumped 18% in the past year to 3,809, up from 3,216 in 2016/17, driven by the information HMRC has received under the common reporting standard (CRS).

The common reporting standard allows the Revenue to receive information about UK residents with offshore bank accounts.

HMRC’s ability to identify tax evasion cases will be further strengthened when it starts receiving data on offshore bank accounts from the next wave of countries signing up to the CRS in September 2018. These include Switzerland, the UAE, Hong Kong and Singapore.

The mandatory disclosure regime will also come into force across the EU at a later date, which will again provide HMRC with access to even more data. The disclosure requirement will apply to all intermediaries, such as tax advisors, that are involved in cross-border tax arrangements. Under the regime, member states will automatically share any information they receive.

Jason Collins, partner at Pinsent Masons, said: “HMRC is receiving plenty of political encouragement in this crackdown as it looks to increase prosecutions across the board. Both HMRC’s local offices and its specialist directorates are on the lookout for any transaction out of the ordinary that might lead them to a big-ticket tax evasion case.

“Governments believe that some professionals and banks are still helping clients to be non-compliant, especially by devising ways to avoid reporting. The EU and OECD have set out mandatory disclosure regimes to tackle this perceived abuse – meaning professional services firms and banks need to be vigilant that they are not being embroiled in serious non-compliance.”

A serious tax evasion case is defined by HMRC as one involving the evasion of more than £50,000 in tax, or where prosecution is possible.


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