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Taxman urged to carry out more raids

04 June 2014
Categories: News , Investigations

HMRC could miss prosections target for evasion, warns law firm

Tax investigators are in danger of missing their prosecutions target for the year, legal experts have warned, after official figures showed a fall in the number of raids carried out by HMRC.

Law firm Irwin Mitchell expressed concern that the Revenue executed 744 search warrants in 2013/14: a fall of 6% on the previous 12 months and the first dip since 2010/11, when figures began a marked year-on-year rise.

Raids are carried out on homes and business premises when HMRC conduct investigations into suspected criminal activity. The department geared up on its evasion crackdown in 2011/12 and increased its prosecution ambitions fivefold.

Its 2014/15 target of 1,165 evasion prosecution is as part of a government pledge to ensure all taxpayers play by the rules. But activity is slowing and investigators need to ramp up their work level, according to Irwin Mitchell partner Phil Berwick.

“HMRC appear to be struggling,” he said, suggesting that the labour-intensive nature of raids and the many other demands placed on the tax department are taking their toll. “The Revenue is being pulled in many different directions, which doesn’t help.”

When asked if fewer warrants was a result of more taxpayers making use of so-called professional amnesties to admit to undeclared earnings, Berwick pointed out that only the Lichtenstein disclosure facility guarantees immunity from prosecution.

“It’s not secret that the Revenue wants to push people with a problem into one of the disclosure initiatives because… they could [help] get towards the prosecutions target,” he said.

Berwick added there was an “increasing tendency to go for softer targets, where smaller sums are involved but a conviction may be easier to obtain.”

Nevertheless, the prospect of being identified as a tax evader of fraudster is greater than ever, he claimed, with the Revenue getting better at using its bank of data and information that could be expected to be bolstered by searches for additonal evidence.

Categories: News , Investigations
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