HMRC raids on premises in the course of investigations into tax evasion have gone up by almost a fifth in the last year and have trebled in the last four years, according to analysis by Pinsent Masons
There were 593 property raids last year, an 18.6% increase on the total of 500 in 2013/14. In comparison, the 2010/11 tax year saw just 196 such raids.
Pinsent Masons say the figures reflect the intense pressure being placed on HMRC to increase the number of criminal prosecutions for tax evasion, as raids on premises are often conducted early in the morning or over holiday periods to carry an element of surprise, and allow the seizure of personal documents and electronic files which may prove crucial to conviction.
In 2013, the government set a target to secure 1,165 prosecutions in 2014/15, up from the 165 obtained in 2010/11.
Paul Noble, tax director at Pinsent Masons, said: ‘HMRC is being pressured to increase the number of prosecutions secured for criminal tax evasion and has now been provided with the increased means to do so. It is pursuing as many cases as possible in an effort to meet targets set by the government.
‘Raids on premises are often an essential means of gathering evidence that is needed in cases dealt with for prosecution. It is labour-intensive work but needed in such investigations. A non-criminal tax enquiry is much more cost effective but does not always send the deterrent message HMRC wish to convey.’
Pinsent Masons’s analysis also indicates a rise in the number of custodial sentences given out in cases of criminal tax evasion, up by around 30% over the last four years, from 171 in 2011 to 220 in 2014.
The average sentence length has fallen by around 60% over the same period, from 41.3 months in 2011, to 17.7 months in 2014. Pinsent Masons argues this suggests that HMRC is making use of its prosecution powers in a wider range of cases than previously.
Noble said: ‘An increase in the number of raids conducted and custodial sentences meted out for tax evasion reflect the fact that HMRC is now casting its net wider. It is no longer focusing narrowly on HNWIs and those guilty of the most serious evasion. It is targeting a broad range of taxpayers and refusing to let those suspected of more minor offences slip through the cracks.’
