HMRC Crack Down on VAT Evasion Offences

Information recently released under the Freedom of Information Act confirmed that the number of tax evasion cases lined up for prosecution by the HMRC nearly doubled in the last three years. This fact confirms that the HMRC and government have decided to sharpen their focus on prosecuting companies who commit tax evasion and individuals whom they suspect of criminal activity. After criticism for selecting low-value cases that would enable it to meet its target of increasing prosecutions they have decided to shift their focus to more complex cases.

One such recent case was where Narita Bahra KC, leading two specialist senior juniors, was instructed to defend a complex and unusual joint HMRC and Police investigation in which it was alleged that tax evasion emanated from mobile phone theft through companies. This involved consideration of a vast amount of evidence and complex issues of taxation law as well as the Crown Court’s jurisdiction to interfere with and decide matters that ordinarily fall solely to be determined by the First-tier Tribunal (Tax Chamber).

The team were successful in challenging the prosecution’s dogged approach which emanated from growing pressure to probe that the HMRC and Police had workable strategies in place to stamp out evasion.

The Prosecution alleged their client had masterminded fraud, theft and tax evasion by taking advantage of lacuna in the Value Added Tax Act 1994.

The team successfully worked together to assimilate and consolidate complex taxation issues of relevance to the client’s defence so that they could be followed by a lay jury and to secure the best outcome for the client.