Inland Revenue Responds To NAO Tax Fraud Report

by Robert Lee, Tax-News.com, London

05 March 2003

The UK's Inland Revenue has responded to a report recently released by the National Audit Office (NAO) calling on it to increase the number of prosecutions for tax evasion brought each year in order to send out a warning to potential offenders.

According to the NAO report: 'Each year just over 60 individuals are prosecuted for fraud, achieving a 75 per cent conviction rate with the majority of those convicted facing custodial sentences. Criminal prosecutions are concentrated on the higher value and more complex cases, the majority involving individuals involved in small and medium sized enterprises with ownership or control over the business or access to and control over cash, or professionals such as accountants, tax advisors and solicitors.'

The government watchdog went on to suggest that the Inland Revenue should extend both the number and coverage of its criminal prosecutions in order to ensure deterrence is maintained across the whole of its customer base.

However, responding recently to the report, the UK tax agency ducked the implied criticism, arguing that:

'The Revenue will continue to hit cheats in the pocket and to prosecute when appropriate. We have continued to develop our ability to detect and deter dishonesty. As the report acknowledges, we have a high success rate in our prosecutions and the courts take a very serious view of tax cheats when sentencing those who have been found guilty.'

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