If HMRC investigate and find evidence of dishonesty or cheating then you may be looking at a criminal investigation for tax fraud and prosecution, leading to a prison sentence and a fine. The sort of behaviour that this might cover includes claiming that genuine loans were made as part of the scheme when they were not genuine; or the writing of fake work diaries showing the taxpayer having spent time in the business when they were elsewhere.
The penalties for tax fraud in the UK are heavy as this extract from the Sentencing Council’s guidelines show:
Fraud: Cheating the public revenue, common law
Triable on indictment only
Maximum: Life imprisonment
Offence range: 3 – 17 years’ custody
User guide for this offence
My advice is to take any suggestion of penalties by HMRC very seriously.
Increasingly if they are looking at charging a penalty they will seek a meeting with you to do what they call “a fact find” and ask you to confirm that you have read and understood their Human Rights fact-sheet. Do not treat this meeting casually!
I have accompanied clients using the Public Access Scheme to a number of these meetings recently and the nature and tone of these meetings differs depending on whether you get an “old school” inspector trying to arrive at a fair settlement or one of the younger more aggressive breed of investigators who seem to be out to obtain evidence supporting the charging of a “deliberate” penalty or worse, evidence that might enable them to say that they suspect tax fraud leading to the issue of COP 9 or worse a criminal investigation.
Should you require advice and representation about settlement of tax avoidance schemes, a settlement opportunity, settlement guidance and tax avoidance penalties, click here to instruct Patrick Cannon today.