The number of tax evaders facing prosecution is set to dramatically increase, according to the head of the Crown Prosecution Service (CPS).
It wants a five-fold increase in the number of prosecutions, reaching 1,500 by 2014-15. And it will target middle-income professionals, with lawyers and plumbers among the professions named as under scrutiny by Keir Starmer, the director of public prosecutions.
People who run tax avoidance schemes, such as those used by a number of high-profile celebrities, will also face the prospect of court action. This marks the first sign of a real clampdown on these following several major newspaper investigations.
Experts say targeting these groups will lead to a higher number of convictions than from more challenging investigations into crimes such as cross-Europe smuggling.
The CPS's high strike rate
The CPS has handled prosecutions for HM Revenue & Customs since it was merged with the latter’s prosecution office in 2010. It currently has an 86% conviction rate on tax prosecutions. But this new target marks a change in direction, as HMRC previously didn't favour prosecutions in many cases.
The CPS estimates tax evasion costs each UK household £530 a year. The Government is investing a total of £1 billion in HMRC over this Parliament and wants to see a return of £22 billion a year by 2014/15.
The Government also wants to introduce a so-called General Anti-Abuse Rule as part of this year’s Finance Bill to make it easier to close avoidance schemes.
HMRC has already launched 'tax forces' look at professions including solicitors, street traders and taxi drivers, electricians and eBay traders and direct sellers such as Ann Summer party reps over the past year.
And last week it announced that 100 extra inspectors would be recruited to its Affluent Compliance Team, which targets high earners.