Vow to prosecute more tax-dodgers

Keir StarmerSophisticated "dishonest" tax avoidance schemes will be targeted under a crackdown that will increase prosecutions against tax dodgers, the Director of Public Prosecutions has pledged.

Keir Starmer has warned that prosecutors will go after fraudulent schemes that are dressed up as legitimate investments.
The DPP suggested the economic climate means it is more important than ever to tackle dishonest avoidance and tax evasion, and has pledged to increase the number of prosecutions fivefold over the next four years.

In a speech at the Crown Prosecution Service headquarters in London he is expected to say: "Let us bury - once and for all - the myth that tax evasion is a victimless crime. We all pay for it in the end, directly or indirectly.

"Tax evasion is not a victimless crime. It is not a 'fiddle' in some sort of legal grey area. It is ordinary fraud involving dishonesty and greed. And we all pay for it."

The CPS secured 550 tax evasion convictions in 2011/12. Although tax avoidance is legal, aggressive exploitation of the complex rules has pushed the issue up the political agenda.

Following a wave of revelations about the financial loopholes used by the rich and famous, as well as big business, to legally side-step hefty tax bills, the Government vowed to tackle aggressive avoidance.

Mr Starmer will add: "I want to highlight an important breakthrough in another part of the prosecutorial forest, namely the ability of HMRC and the CPS to extend the reach of the criminal law by including a further category of offender in the list of successfully prosecuted cases - namely, those who devise and operate sophisticated schemes to abuse direct tax regimes: dishonest tax avoidance schemes.

"These cases typically involve highly intelligent individuals, not infrequently skilled professionals with close knowledge of the tax laws, who go to great lengths to dress up a dishonest and fraudulent tax evasion scheme as a legitimate investment scheme attracting tax relief or other tax advantages.

"Those setting up the schemes often use extremely complex financial instruments and corporate entities to create a subterfuge. Long and complicated audit trails are then used to disguise the scheme. But an experienced investigator and a skilled prosecutor can spot the telltale signs of dishonesty, whether that be false or misleading documents, false turnover figures, hidden trading transactions, or payments that do not reflect commercial reality."
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