Tax Avoidance: Prosecutions

Treasury written question – answered on 23rd October 2018.

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Photo of Madeleine Moon Madeleine Moon Chair, Defence Sub-Committee, Chair, Defence Sub-Committee

To ask the Chancellor of the Exchequer, how many prosecutions have been made against people promoting disguised remuneration schemes in each year since 1999.

Photo of Mel Stride Mel Stride Financial Secretary to the Treasury and Paymaster General

This Government is committed to tackling avoidance in all its guises. A core part of our strategy has been to tackle the people behind these tax avoidance schemes. We have introduced legislation every year since 2014 providing HMRC with suite of powers to tackle promoters and enablers of tax avoidance schemes, designed to change behaviour and influence those involved to move out of promoting and enabling for good, with various sanctions and penalties for those who don’t.

HMRC are using these powers to challenge all major promoters of avoidance schemes, including disguised remuneration (DR) avoidance schemes. This has resulted in several major promoters stopping selling avoidance schemes and HMRC have also, through court action where needed, required around 30 other high-profile promoters to disclose details of previously undisclosed schemes, enabling HMRC to take counter-action on these schemes much earlier.

HMRC is considering whether some schemes involving attempts to avoid tax through the use DR may be fraudulent in nature.

HMRC will consider criminal investigation where appropriate, for example, where there is evidence of fraudulent behaviour. Promoters of tax avoidance schemes have been prosecuted, leading to convictions and jail terms for example:

  • In 2016 four men were found guilty of promoting and operating a fraudulent tax avoidance scheme, to defraud taxpayers out of £100 million.

  • In 2017 a chartered accountant was sentenced to eight years in prison for setting up and promoting a number of fraudulent schemes to wealthy professionals.

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