Cheating the public revenue is a judge-made criminal offence.

In order to obtain a conviction, the prosecution only has to show that the defendant has made a false statement with the intention of defrauding HMRC: see R v Hudson [1956] 2 QB 252 .

Positive acts are not required, and a failure to act can still amount to cheating the revenue.

In the case of R v Mavji, 84 Cr. App. R 34 the Court of Appeal held that an actual act of deception is not necessary. A failure to submit a VAT return or pay the VAT due can be sufficient if done so with dishonest intent to evade tax.

In relation to income tax, the prosecution can also charge the statutory offence of being ‘knowingly concerned’ in the ‘fraudulent evasion’ of income tax under section 106A Taxes Management Act 1970.

However, the Court of Appeal held in R v Godir [2018] EWCA Crim 2294 that recklessness was not sufficient to convict someone of this offence, although ‘wilful blindness’ as distinct from recklessness could be sufficient grounds to convict.

What matters in tax fraud cases is whether you were behaving dishonestly and intended to cause a loss to HMRC or perhaps were wilfully blind to the fact.

In the end, whether the offence you are charged with is under section 106A Taxes Management Act 1970 or the common law offence of ‘cheating the revenue’, the ultimate question will be whether there was an intent to defraud – i.e. was the Defendant acting honestly or not?

It is vital that your defence in a tax fraud case is prepared with precision and care. No detail should be considered too small. The difference between acquittal and conviction may rest on some apparently obscure fact or explanation, or by pressing for thorough disclosure and examination of the prosecution’s case.

Please contact Patrick Cannon for an initial discussion or advice.

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