Tax Fraud, VAT Fraud and Excise Fraud
Tax fraud is a catch all phrase, which covers tax evasion and tax avoidance. Tax evasion is when someone conceals income and other relevant information from HMRC. Tax evasion is illegal and is a criminal offence. Tax avoidance is, essentially, exploiting the tax system and any loopholes within it to find ways of reducing the tax that is owed. Tax avoidance is not unlawful. Tax avoidance goes against the spirit of the law rather than the letter of the law.
HMRC takes a very dim view of both tax evasion and tax avoidance, not least because it sees both as depriving the Treasury of tax receipts that are used to fund public expenditure for the benefit of the nation. The most recent Government figures suggest that tax avoidance in the UK costs the Treasury about £1.8 billion a year, while tax evasion is believed to cost in the region of £5.3 billion per annum.
For this reason, HMRC has an aggressive anti-evasion and anti-avoidance policy and has also tried to blur the lines between evasion and avoidance in its attempts to ‘win the battle.’
Examples of Tax Fraud Activity
Tax fraud is a broad term used to describe a wide range of illegal activity. This activity includes:
- Failing to report to HMRC all sums paid to yourself or your staff.
- Not charging VAT when necessary
- Charging VAT or deducting PAYE tax from employee earnings but not paying it to HMRC
- Falsifying tax return information to reduce tax liability
Tax fraud is also committed when goods that are liable for excise duty, customs duty or VAT are smuggled into the UK. Not being registered for VAT when required is another example of tax fraud.
Contact us if you are being investigated for Tax Fraud
If you are being investigated by a regulatory body for tax fraud, please get in touch immediately. We have the experience and expertise to challenge the investigation, prepare a defence, reduce the chances of an HMRC criminal investigation and respond to interviews under caution, dawn raids and arrests.
