Mike Down

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Mike Down


Catching the tax dodgers

Readers will be aware of our concerns over HMRC’s apparent failure to come to grips with tax evasion. Whilst we consider that the department is now well on the way to preventing and tackling artificial tax avoidance, HMRC’s own ‘Tax Gap’ figures show that it has been less successful in cracking down on tax evaders and the shadow economy.

It is against this background that the Channel 4 documentary ‘Catching the tax dodgers’ made very interesting – and intentionally scary - viewing. Five years in the making, the programme provided a somewhat bewildering insight into HMRC’s internal workings on the tax investigation front. Demonstrably ‘putting on the frighteners’, the HMRC personnel involved made it absolutely clear that there is no hiding place for those – across the whole spectrum of society - intent on dodging their tax obligations.

With a prime focus on the historic ‘Customs and Excise’ side of what is now HMRC, three real-life investigations were covered including: a criminal international excise fraud case relating to the import of wine and millions of pounds of lost duty; a criminal case for failure to submit a return for a single VAT period and settle the VAT due on time; and, a civil case where a banking executive had filtered untaxed monies into a Swiss bank account. 

So, what can be gleaned from this? Undoubtedly HMRC is now using its wide powers to criminally investigate and prosecute more ‘tax dodgers’. But what the programme showed was the old ‘Customs and Excise’ going about work they have always done.

There was a brief mention of HMRC’s powerful super-computer ‘CONNECT’ which suggested that the department now has sufficient information to produce an income and outgoings spreadsheet for every taxpayer in the country. However, no evidence was brought forward to support this scary claim; nor were Data Protection Act implications explored.

The commentary surrounding the introduction by HMRC of its ‘Affluent Unit’, which looks after and risk-analyses wealthy taxpayers and high-profile celebrities who typically have more complex financial affairs, was interesting. This is a section of society which, in recent years, the public has been encouraged to regard as more likely to have tax irregularities which may require a more vigorous focus from HMRC. 

Overall, the documentary reflected only a tiny percentage of typical HMRC counter-evasion casework. Perhaps another documentary is needed to enable HMRC to explain what it is – or isn’t – doing to tackle the direct tax evaders on the former ‘Inland Revenue’ side of the department?

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