THERE HAS been much talk in the media and amongst politicians in recent months about tax avoidance and tax evasion. The vital distinction between the two is that tax avoidance is the lawful arrangement of one's affairs so as to reduce or avoid a liability to tax which might otherwise arise. Tax evasion is unlawful. Historically, accountants have tended to deal with HMRC on civil matters. However, the recent announcement by the chief secretary to the Treasury that £900m will be made available to HMRC to reduce non-compliance in the tax system and fund an intended five-fold increase in criminal prosecutions, will mean that more taxpayers and their advisers will find themselves at the sharp end of an investigation for tax evasion.
Who investigates and prosecutes tax fraud?
HMRC is responsible for investigating suspected crime involving all of the taxes and other regimes it is responsible for. It does not, however, decide whether a criminal prosecution is to be commenced. The decision whether to bring a criminal prosecution is made by an independent prosecuting authority.
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