Middle-income tax dodgers face CPS crackdown

Simon Ward
by Lovemoney Staff Simon Ward on 21 January 2013  |  Comments 21 comments

The Crown Prosecution Service wants to increase its number of tax evasion cases going to court by fivefold over the next few years.

Middle-income tax dodgers face CPS crackdown

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.

More on tax

How to make sure you’re on the right tax code

How to get your online self-assessment tax return right

Beware this tax scam

How to get a tax refund

Enjoyed this? Show it some love


Comments (21)

  • MK22
    Love rating 169
    MK22 said

    That makes perfect sense. Let's prosecute these pesky people who insist on doing something useful in society. Goodness only knows we wouldn't want to upset the wonderful "foreign" companies who have taken over our industry but have no intentions of ever paying taxes here, do we?

    Report on 22 January 2013  |  Love thisLove  3 loves
  • PDB11
    Love rating 75
    PDB11 said

    The foreign companies - and many others - are doing tax avoidance legally. To catch them requires a change in the law, which in turn requires an act of Parliament. I agree that there are things multinational companies are doing that really do need a change in the law - although not some of the absurd changes I see suggested here! Unfortunately. neither HMRC nor CPS can pass acts of Parliament. So they have no power to go after these, however much they may want to.

    The Blair government put some effort into plugging loopholes in the law, making legal tax avoidance a lot more difficult. Whenever they did so, there was an outcry against a "Stealth tax". Remember those?

    "Damned if you do, damned if you don't" was the message the people sent to the government. In which case, they're going to take the easier path to damnation, aren't they?

    Finally, multinational companies with turnovers in the billions can afford to put a lot more effort into finding legal loopholes than the rest of us. So, even if the law were changed, it would probably have less effect on them than on ordinary people.

    Report on 22 January 2013  |  Love thisLove  2 loves
  • george19a
    Love rating 28
    george19a said

    Only too obvious by its omission is any reference to the multinationals that have been ripping off British taxpayers year after year, but then what's new? Where is the HMRC task force investigating the tax avodance schemes operated by the multi-nationals? Where are the pending prosecutions?

    Nobody is going to prosecute the multi-nationals in just the same way that nobody deemed it appropriate to prosecute the bankers that ripped us off for billions.

    The combined financial impact arising from the activities of the multi-nationals and the bankers far exceeds £530 per household!!!

    The fairness in British society has all but disappeared, little wonder that the general public has lost interest and faith in its politicians.

    Report on 22 January 2013  |  Love thisLove  2 loves
  • time2go
    Love rating 68
    time2go said

    Equally, there was hardly any uproar when 'The Independent on Sunday' reported that Premier League Clubs rake in £2.2 billion and pay a mere £3 million in corporation tax. Heaven forbid that the Government should tax 'The Beautiful Game'...

    ... much easier to criminalise / demonise those trying to struggle with trying to provide their families with some kind of future. The very wealthy pay large sums to very wealthy law firms and accountancy firms to protect their wealth and screw everyone else.

    If you were very wealthy would you do the same?.... guess it depends how strong your morals are.

    Some of these international companies, footballers,celebrities etc have already shown their moral values. Following this everything has proceeded as always...

    I suppose most of us are so busy trying to earn a living (due to the taxes imposed by the past and present Governments (Blair's Brown's and Cameron's) that they make sure we have little time to protest.... this is just what the wealthy want.

    Report on 22 January 2013  |  Love thisLove  1 love
  • JustAThought
    Love rating 0
    JustAThought said

    I run a small company which has a tax avoidance scheme as a shareholder. The scheme calls itself a company registered in the Bahamas and has anonymous Guernsey nominee directors; however, all the members of this scheme/private company are UK residents avoiding tax. Perfectly legal - yes, but ridiculous; whether or not HMRC can stop this kind of nonsense remains to be seen.

    Report on 22 January 2013  |  Love thisLove  0 loves
  • george19a
    Love rating 28
    george19a said

    Whilst there are only a few comments there does seem to be a common thread.

    So why not tax the multi-nationals on turnover rather than profit? There is nothing new in this arrangement. Customs & Excise always taxed gambling on turnover, why not the multi-nationals? Ok so some of them will threaten to leave, to take their jobs away. Get real these jobs do NOT belong to the multi-nationals they belong to the people that fill them, where ever they come from and the general public that finance them. In any event there are plenty of entreprneurial people only too willing to fill the gaps.

    Neither do I see why the revenue can't tax celebrities & sports on turnover, leaving it up to the clubs, the agents and the management firms to deduct the tax already paid from the fees and wages of the individuals.

    Report on 22 January 2013  |  Love thisLove  1 love
  • Mike10613
    Love rating 626
    Mike10613 said

    It will be interesting to see how many Ann Summers and Avon reps are taken to court. It could be the end of the Tupperware culture. The tax system needs reform, many taxes are just not working because people don't pay them. VAT is the only tax that really makes any sense, the rest could be scrapped in time and all the resources focussed on collecting in just one tax. It could be supplemented throughout Europe with a financial transactions tax.

    Common-sense from politicians and bureaucrats? Not a chance!

    Report on 22 January 2013  |  Love thisLove  1 love
  • r
    Love rating 98
    r said

    Oh! Dear! Everyone is slating the multinationals again.

    @PDP!! said "The foreign companies - and many others - are doing tax avoidance legally. To catch them requires a change in the law, which in turn requires an act of Parliament."

    We can't change the law because the illustrious EU, to which our leaders have signed us up, allow pan-EU companies to choose in which country they pay their taxes!

    HMRC and HMG are powerless to do anything because the multinationals are behaving legally.

    The only way to go back to making our own laws on this (and anything else) is to get out of the EU. We can then go back to what we voted for in 1974, a "Common Market" i.e. a trading arrangement.


    Report on 22 January 2013  |  Love thisLove  0 loves
  • MK22
    Love rating 169
    MK22 said

    Paying taxes in your "base" country is not a problem. Alleging that your coffee beans are ground in Luxemburg and paying millions for use of the corporate logo and other such scams clearly are.

    Anyone know what percentage of profit Starbucks pay in France or Germany??

    And, yes, I would change the rules to tax on income/turnover not net profit, after all if as individuals we do that, why can't everybody?

    Report on 22 January 2013  |  Love thisLove  0 loves
  • jedi44
    Love rating 43
    jedi44 said

    @Mike10613. I usually agree with most of your posts but I can't see VAT as the only tax being a very fair system. Even if essentials were VAT-free, allowing those on low incomes to exist, it wouid still mean that the rich, having more disposable income left than before, would be the only people able to afford luxuries of any sort. Would they really spend enough, rather than stash it away, to fund the state, or what's left of it once this government's finished with us?

    Report on 22 January 2013  |  Love thisLove  0 loves
  • oldhenry
    Love rating 343
    oldhenry said

    The Governmnet will never tackle multinationals where most 'avoidance' is generated. It prefers to make a large song and dance about those on the edge who avoid a relatively minimal sum.

    Don't forget thattehgovernmnet itself avoids tax by putting building leases offshore. It also allows PFI schemes which are utterly wasteful of taxpayers' money, to be offshore, again avoiding tax.

    The EU will not allow Cameron to do anything with companies based in other EU countries . Of course not , it is our fault for having such a high corporation tax in the first place.

    The cash economy will survive as it has since cash was invented. Many of us will take a lower price for 'cash in hand' and why not? I did not get free Olympic tickets and did thise ministers that attended pay? Don't hold your breath. There is oone law for the law makes and another for the peasants that do the paying in the country. We need to get lessons from the greeks in tax avoidance.

    Report on 22 January 2013  |  Love thisLove  0 loves
  • Ripped off
    Love rating 17
    Ripped off said

    Instead of starting in the middle or the bottom end like ebay traders, why don't the HMRC parasites stick their necks out for once and go after real tax dodgers like the royals. Once they have started there then head after those just under the Royals like Cameron and his merry men etc. By far, this lot of free loaders are the biggest tax cheats of all.

    From the commons speaker to the royals every one of them milk "the benefit's in kind" free for the chosen few" its all at our expense. From every angle the chosen lot can they milk it. From free VIP first class travel, endless holidays, endless free fully staffed country homes, luxury cars and drivers the list goes on. Al these benefits in kind are taken for granted for this lot, while we the hard working british ants. "the ordinary the tax payer" pay for it all, but are constantly denied a fraction of the same to run our business.

    So my question is, Why don't HMRC go after that lot instead of hounding the easy targets like the hard working self employed of the UK.?. Answer if they did, they would be sacked on the spot for rattling the gravy train.

    It wouldn't be so bad if the rules the HMRC army worked under rules that were not rigged to give them all the power to distort, twist and manipulate at will. But instead, the rules are rigged to give the HMRC all the power and more, while we are trapped, alone and handcuffed in the corner with nowhere to go.

    Even if they acted on facts instead of mainly, jealous assumptions. But instead these HMRC parasites use entrapment & fear, then from my experience, make it up as they go along in the hope their chosen victim will give in and pay up.

    Even when there is nothing to chase, if your name is pulled out of the hat, then from my experience the HMRC will hound you for years, they will deliberately run your accountants fee's through the roof, in the vain hope you will decide to cut your loses then, finally admit to something, anything, as long as they can achieve another tick toward their bonus target.

    In my experience the HMRC have little time for truth and facts, like most shysters, they are simple out for ticks against their name and a quick buck.

    Report on 22 January 2013  |  Love thisLove  0 loves
  • teamgreenzx7r
    Love rating 1
    teamgreenzx7r said

    The C.P.S (Criminal protection Society) will only take on cases they have a high percentage chance of winning. Nothing to do with justice or fairness, its all about statistics !

    Report on 24 January 2013  |  Love thisLove  0 loves
  • SiGl26
    Love rating 26
    SiGl26 said

    So Ripped off, HMRC work on 'jealous assumptions'... Such as that the Royals are tax-dodgers, that David Cameron and his merry men evade tax on benefits in kind? Some evidence supporting these allegations might be in order...

    Or, reading between the lines, are you just upset that you have been subject to a tax investigation that did not immediately believe your story? No smoke without fire is what I always say... But I don't actually, I like to see evidence.

    Report on 25 January 2013  |  Love thisLove  0 loves
  • Ripped off
    Love rating 17
    Ripped off said


    Tax turnover! are you crazy. Turnover is not profit. For a start most turnover ends up as wages for staff. then another chunk is hoisted in business rates by the government, then another chunk is hoisted in national insurance. If Cameron merry men every decides to milk turnover, there would be no point in bothering and it would lead to mass unemployment over night.

    Everyone on this latest Cameron band wagon of bashing the likes of starbucks needs a reality check.

    These outfits do pay tax, for example VAT on every penny they turn over, they also pay way over the top business rates, there for argument sake is your tax on turnover firmly up and running. The UK would be lost with the likes of starbucks etc so Get real!!


    Yes from my direct experience, the HMRC shysters do work on nothing more than "jealous assumptions".

    Yes the HMRC have far too much power.

    Yes I believe HMRC should fund their own investigation up front.

    Yes HMRC should be held to account when they for no more than spite and sour grapes, deliberately run a victims accounts bill though the roof. In my direct experience the HMRC are no better than shysters who make it up as they go along in the hope they might get lucky.

    As to my other points, according to Cameron we are all in this together, yeh right!!!.

    OK. How can that be, just one example who is paying the council tax ( a tax we are forced to hand over on demand ), electric and gas bill at his flat at number 10? or for that matter, his county home know as checkers. Not to mention other running costs like, the army of butlers etc etc. all employed by the tax payer to make the Cameron family life easy?

    Yes I agree just that one point maybe is small change in the whole scheme of things. But when you add in the Royals with all their tax payer staffed & funded homes, add the rest of Cameron's chosen few with all their tax payer staffed & funded homes then add in all the other benefits in kind etc. The overall cost to us is billions.

    Now!!!!!! lets see you answer how, "we are all in this together"??????????????

    Report on 26 January 2013  |  Love thisLove  1 love
  • MK22
    Love rating 169
    MK22 said

    Ah, so you agree, Ripped off, that it is wrong to tax individuals on income. After all, without the money we spend on housing, food and power, we wouldn't be able to work and earn money, so why can't we offset those costs before we pay tax? And there is a very good reason why everybody slates our Prime Minister and the likes of Starbucks. It is because, frankly, they aren't very good.....

    Report on 27 January 2013  |  Love thisLove  0 loves
  • tuttogallo
    Love rating 99
    tuttogallo said

    A turnover tax is good idea, because the use of fake deductions does not reduce tax liability. It could be phased in at a relatively low level and pitched so that to small enterprises who pay their taxes would on average pay what they do under the present system. Of course as in any change to taxes and benefits, there would be winners and losers.

    At present there is an insane merry go round like this: accountants find new loophole, govt passes a finance act to plug the loophole, accountants find new loophole etc etc. This is slow and costly. A new approach is needed whereby any scheme which sets out to subvert the intention of the tax law is illegal (rather than the present approach which goes by the letter of the law). Safeguards would be needed to ensure that HMRC did not abuse these new powers.

    JustaThought: your scheme would obvioulsy fail the "intention to subvert the tax law" test

    Report on 27 January 2013  |  Love thisLove  0 loves
  • Mike10613
    Love rating 626
    Mike10613 said

    @Jedi44, I think all taxes are paid by us the people. If they put up corporation tax, it is simply passed on to us the people. Vat has different rates for different products, essential has no VAT or a lower rate. I would like to see a higher rate maybe 50% on obvious luxuries, the diamond jewellery, the super cars and the private jets. I have no objection to people being rich, but when they should be willing to pay their tax and 50% on their Coco Chanel and their Prada would appear to make sense. It makes more sense than people on minimum wages paying tax and national insurance. If you ask the makers of Walkers crisps to pay more corporation tax, it doesn't hit the rich, they just put a penny on a bag of crisps. We pay tax, the people.

    Report on 27 January 2013  |  Love thisLove  0 loves
  • electricblue
    Love rating 769
    electricblue said

    In case you hadn't noticed, Mike - aircraft actually have wings and move around quite a lot. Almost all private jets are leased and their ultimate country of ownership could be anywhere in the world. Probably the most difficult to tax asset anyone could come up with. The super rich don't actually have to pay tax on anything if they choose not to, an absolute fact. Your politics of jealousy won't change the world. All luxury goods should have a higher rate of tax, but that includes obscenely huge plasma TV's and all the other pointless consumer electronics which even those on minimum wage seem to think of as their right.

    Report on 28 January 2013  |  Love thisLove  0 loves
  • oldhenry
    Love rating 343
    oldhenry said

    Just to put a it of reality into this, the Inland Revenue ( as it was when I was an accountant) often worked on 'tip offs'. These could be a neighbour , or another business person with whom you had a disagreement, writing to the IR saying you were concealing large amounts of income. This was enough to start an investigation and it certainly costs the taxpayer in accountant fees and legal fees ,if it went to court, which was extremely rare as the cases were often not provable. The IR hated it when it was shown the tip off was the result of malice as it was no brownie point for them and they would refuse to admit this whatever proof we could come up with. They wanted admission and a payment so they could 'bank' it with their bosses and the governmnet could say we have another tax dodger. I put the government agencies on the same footing as the cash- in- handers that buy yachts for cash and keep them in marinas in Spain, or Greece and they do, I know.

    Report on 28 January 2013  |  Love thisLove  0 loves
  • yocoxy
    Love rating 152
    yocoxy said

    It seems that every comments discussion becomes an attack on big bad corporations or those evil politicians, regardless of the article..

    It must be tough to spend so much time and emotional energy being angry..

    If you don't like Starbucks don't buy their products, if you want to influence politics either vote or even better join a political party and get yourself nominated..

    .. Or I suppose you could go to a financial website and rant.

    Report on 01 February 2013  |  Love thisLove  0 loves

Post a comment

Sign in or register to post a reply.

Our top deals

Credit card
Balance transfers rate and period Representative

Barclaycard 31Mth Platinum Visa

0% for 31 months (2.99% fee) Representative 18.9% APR (variable) Apply
Representative example: Assumed borrowing of £1,200 for 1 year, at a Purchase Rate of 18.9% (variable), representative 18.9% APR (variable). Credit available subject to status. A Balance Transfer fee of 3.5% will be applied, then reduced to 2.99% by a refund (terms and conditions apply). Plus an additional £20 fee refund on balance transfers over £2000.

Barclaycard 30Mth Platinum Visa

0% for 30 months (2.89% fee) Representative 18.9% APR (variable) Apply
Representative example: Assumed borrowing of £1,200 for 1 year, at a Purchase Rate of 18.9% (variable), representative 18.9% APR (variable). Credit available subject to status. A Balance Transfer fee of 3.5% will be applied, then reduced to 2.89% by a refund (terms and conditions apply). Plus an additional £20 fee refund on balance transfers over £2000.

MBNA 30Mth Platinum Credit Card Visa

0% for 30 months (2.89% fee) Representative 18.9% APR (variable) Apply
Representative example: Assumed borrowing of £1,200 for 1 year, at a Purchase Rate of 18.9% (variable), representative 18.9% APR (variable). Credit available subject to status.
W3C  Thank you for using One Flew Over the Cuckoo's Nest