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Business raids up in HMRC crackdown

THE NUMBER OF RAIDS on companies’ premises by HM Revenue & Customs has trebled over the past four years, according to research by law firm Pinsent Masons.

Nearly 600 properties were raided this year as HMRC pursues its target of 1,165 tax evasion prosecutions over the course of 2015.

The number of raids on premises carried out by HMRC in the course of investigations into tax evasion has increased by almost a fifth (18.6%), rising from 500 in 2013/14, to 593 last year, Pinsent Masons found. In 2010/11, just 196 were conducted.

In 2013/14 the taxman recouped £23.9bn in tax avoidance and evasion.  

The total number of tax evaders given a custodial sentence has risen by around 30% over the last four years; from 171 in 2011 to 220 in 2014. The average sentence length has fallen by around 60% over the same period, from 41.3 months in 2011, to 17.7 months in 2014.

That trend suggests that HMRC is making wider use of its prosecution powers and pushing for maximum punishment in a wider range of cases, according Pinsent Masons tax director Paul Noble.

He said: “An increase in the number of raids conducted and custodial sentences meted out for tax evasion reflect the fact that HMRC is now casting its net wider. It is no longer focusing narrowly on HNWIs and those guilty of the most serious evasion. It is targeting a broad range of taxpayers and refusing to let those suspected of more minor offences slip through the cracks.

“Raids on premises are often an essential means of gathering evidence that is needed in cases dealt with for prosecution. It is labour-intensive work but needed in such investigations. A non-criminal tax enquiry is much more cost effective but does not always send the deterrent message HMRC wish to convey.”

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