" I was thrown out of college for cheating on the metaphysics exam; I looked into the soul of the boy sitting next to me.” – Woody Allen
Cheat HMRC? Consider this: £3,558: The amount of tax evaded. £707,200: The penalty First things first; yes those are the correct figures. Given that we’re coming up to the annual tax return filing deadlines and as we have so much in the news at present about tax evasion, we thought this case to be particularly pertinent at the moment even though the appeal ruling came earlier this year. The judgement does beg some interesting questions re what constitutes justice and especially concerning are those comments from the CC judge: “it may be that the defendant…would not be convicted on the criminal standard of all matters…….[but] the conclusion I come to is that the overall picture supports the contention that it is more likely than not that he was involved in criminal conduct over and above the Count to which he pleaded guilty”. Needless to say, if your tax affairs need attention, this case should provide plenty of impetus to start now. Case summary:
- Taxpayer pleads guilty to common-law cheat for evading tax between 1 Apr 2003 and 31 Dec 2004.
- The tax evaded is £3,558.
- HMRC pursues confiscation proceedings.
- Under the Proceeds of Crime Act (POCA), the judge makes a confiscation order of £707,200 (or a 4 years at HM’s pleasure if the taxpayer does not pay by the due date);
- The Court of Appeal upholds the Crown Courts judgement.
It is worth pointing out that anyone coming forward voluntarily to clear up their affairs is highly unlikely to be subject to criminal proceedings as in the above case. Professional advice of course is always recommended before making a disclosure but the new penalty regime is structured to mitigate penalties for voluntary disclosure. A summary of the penalty regime can be found here.