Tax fraud offences are generally created by statutes introduced by Parliament with the offence of ‘Cheating the Public Revenue’ being the exception in that it is a common law offence developed entirely by the law courts and has no specific basis in statute.
Timothy Thompson of Kangs Solicitors comments upon the statutory tax fraud offences of:
- fraudulent Evasion of Income Tax
- fraudulent Evasion of Vat
- fraudulent Evasion of Duty
and the common law offence of:
- cheating the Public Revenue.
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Fraudulent Evasion Of Income Tax | Income Tax Evasion Defence Solicitors
Section 106A of the Taxes Management Act 1970 provides that a person commits an offence if:
‘they are knowingly concerned in the fraudulent evasion of income tax by themselves or any other person’.
The elements of the offence are that the accused person must have:
- actual knowledge of the offence;
- actual involvement in the offence; and
- acted dishonestly.
Upon conviction a maximum term of imprisonment of seven years, a fine or both may be imposed.
A taxpayer submits a Tax Return to HMRC which is known to be false in that it deliberately declares a level of income below the correct amount and/or deliberately fails to declare a specific category of income.
Fraudulent Evasion Of VAT | VAT Evasion Defence Solicitors
Section 72(1) Value Added Tax Act 1994 provides that a person commits an offence if that person:
- is ‘knowingly concerned’ in ‘fraudulent evasion’ or deliberately ‘takes steps to’ evade liability of VAT; or
- acquires possession of or deals with goods, or accepts the supply of services and reasonably suspects that VAT has been or will be evaded; or
- provides information or a statement to HMRC that is known to be false, with intent to deceive or provides such information or statement recklessly.
In essence, a person whose deliberate conduct results in the non-payment of VAT may have committed this offence.
If convicted, a person could face a maximum term of imprisonment of seven years or a fine or both.
A person creates and submits to HMRC false invoices resulting in an increase in the correct level of apparent input tax payable with the intent to exceed the amount of output tax payable and thereby dishonestly obtain a VAT refund from HMRC.
Fraudulent Evasion of Duty | Duty & VAT Evasion Defence Solicitors
Section 170 of the Customs and Excise Management Act 1979, creates an offence if any person:
- knowingly acquires possession of any goods,
- which have been unlawfully removed from a warehouse or Queen’s warehouse;
- which are chargeable with a duty which has not been paid;
- with respect to the importation or exportation of which any prohibition or restriction is for the time being in force under or by virtue of any enactment; or
- is in any way knowingly concerned in carrying, removing, depositing, harbouring, keeping or concealing or in any manner dealing with any such goods,
Upon conviction a maximum term of imprisonment of seven years, a penalty or both may be imposed.
An individual imports cigarettes into the UK in excess of that permitted without the requirement to declare and deliberately does not declare the goods with the intent of evading the tax/duty payable had the correct amount been declared.
Cheating The Public Revenue | Cheating the Public Revenue Defence Solicitors
In order to find a defendant guilty of this common law offence a Court would have to consider the defendant’s intentions at the time of the alleged offence and in order to secure a conviction the Prosecution has to prove beyond reasonable doubt that the defendant dishonestly intended to cause a loss to HMRC.
Upon conviction a maximum term of life imprisonment, an unlimited fine or both may be imposed.
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Issues involving HMRC can be very confusing, worrying and daunting.
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