Tax evasion

Tax evasion


If you are facing an investigation for tax fraud, our team of expert tax evasion lawyers in Leeds, Sheffield & York offer the best advice, support and advocacy.

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Tax fraud defence solicitors in Leeds, Sheffield and York

To discuss your requirements please contact Jeremy Scott on 07971520407

Failing to pay the correct amount of tax can have serious consequences for you personally and for your business. Never have more time and resources been focused on investigating and prosecuting tax evasion and avoidance in this country, with HMRC using its increased budget to take a harder line on non-payment.

While tax avoidance strategies can be legal, depending on the circumstances, many legitimate avenues for reducing your tax exposure have been closed. Legal requirements on individuals and companies to ensure that others do not underpay taxes have been introduced. And tax evasion has never been legal in the UK.

Whether you have been charged with not declaring income, doing business “off the books”, using offshore financial arrangements to hide assets, or one of the many other methods of tax evasion investigated by HMRC, penalties can be severe, and prosecution can have damaging reputational and personal, as well as financial, consequences. In serious cases, individuals can face prison sentences if convicted of tax evasion.

Tax fraud is a highly complex and fast-paced area, which requires expert assistance. Our specialist Regulatory and Corporate Defence team has over 40 years’ experience defending companies and individuals charged with the full range of tax evasion offences. We understand how the law and HMRC operate and will take all necessary steps to ensure the consequences of a tax inspection are as limited as possible. Swift, decisive action can often result in cases being dismissed before court proceedings begin, and, where it is not possible to avoid a penalty, our experts can minimise any damage to you and your business.

Early professional advice is vital in these cases. Contact us immediately if you are notified of a tax inspection, or you are concerned your tax affairs may be investigated.

How can Lupton Fawcett help?

We have over four decades of experience defending clients in tax evasion matters. Our understanding of the law in this area is deep and is matched by our knowledge of the processes and practices of HMRC. This insight allows us to be pro-active and decisive, wasting no time in developing the most effective defence strategy in your circumstances.

If you contact us early in proceedings, either before or immediately upon notification of an investigation, this knowledge and experience often enables us to avoid criminal proceedings and limit any penalties imposed. Our understanding of HMRC practices can usually reduce the length and disruptive impact of investigations, as well as enabling us to reduce or avoid unreasonable demands or restrictions being placed upon you.

In most cases, our expertise allows us to negotiate effectively with HMRC and settle matters swiftly on a mutually agreeable basis. Where this is not possible, we put our knowledge and positive, tenacious approach to good use, often drawing on our network of expert financial analysts, to scrutinise the HMRC case and construct your defence.

Our accreditation by the Law Society, membership of the SRA specialist Solicitor Higher Court Advocate panel and ranking in the Legal 500 Regulatory Crime section are all recognition of our expertise in this area. In tax evasion cases, where the consequences can be severe, you need genuine experts in your corner. We are not general criminal defence lawyers, we are specialists in our field, and we are proud of our reputation for winning cases other firms would lose.

What is tax evasion?

Tax evasion is deliberately not paying tax. We have experience with all types of tax evasion cases, including:

  • Income tax evasion
  • Non-payment of VAT
  • Capital Gains Tax evasion
  • Corporation Tax evasion
  • Non-payment of National Insurance contributions

Some strategies for reducing tax liability, known as tax avoidance, are legal. However, HMRC have become stricter on these schemes in recent years, and it can be hard to know where the line between legitimate tax avoidance and illegal tax evasion lies. Previously accepted tax avoidance approaches, such as film and Carbon Credit schemes, have been restricted. Clear and straightforward expert advice is vital in this area, as failing to declare a tax avoidance scheme to HMRC is also an offence. Penalties for not declaring such a scheme include a fine of up to £600 per day.

Deliberately evading tax liability is a different matter. Whether this is done by incorrectly declaring profits, inflating deductions, or filing a misleading return to HMRC in some other way, the consequences can be severe, ranging from fines up to 200% of the tax avoided to significant prison terms.

Who can be prosecuted for tax evasion?

Any type of business, from a self-employed contractor to a large corporation, can be investigated for tax evasion. Whatever your level of income and tax liability, tax regulations apply, and it is important to fully understand what your obligations are.

If you are unclear on your tax position, we can advise you and support you to put the correct procedures in place to avoid accidental underpayment. 

How do I avoid underpaying tax? 

Keeping accurate and up-to-date records is vital to the smooth operation of your tax affairs. Ensuring you have appropriate policies and procedures in place reduces your chances of accidentally putting yourself in a position where you are investigated by HMRC. We can advise on the most suitable, state-of-the-art systems to make the day-to-day running of your business as efficient as possible.

Accurate historical record-keeping will also increase your chances of success if you are investigated by HMRC. We understand precisely what information HMRC require from you during a tax inspection, and which witnesses are best to rely on. Building a successful defence requires pro-active and diligent evidence gathering – we will lead the way in preparing the documentation and witness evidence necessary for the strongest possible rebuttal of the claims against you. 

What should I do if I have underpaid tax?

HMRC’s response to underpayment of tax will always depend on the circumstances. The depth and range of our experience means we have advised on the full range of situations that can arise, such as:

  • Accidental underpayment – usually, once the error is declared to HMRC, there will be no penalty for accidental underpayment.
  • Careless underpayment – a careless mistake can attract a fine of up to 30% of the unpaid tax liability.
  • Deliberate underpayment – deliberately giving incorrect information to HMRC can result in a fine of up to 70% of the unpaid tax liability.

More serious cases, where steps have been taken to hide the deliberate falsification of tax returns (such as the destruction of documents, use of offshore bank accounts, or use of fake invoices) can result in fines of up to 200% of the unpaid tax liability.

If you believe you have underpaid tax, it is almost always advisable to self-report to HMRC. This will usually result in a reduction of any penalty and the avoidance of criminal action, depending on the circumstances. It is important to discuss any potential underpayment of tax with an independent expert before making any decisions, to ensure the best approach for you and your business is taken. Contact us today to get a proper understanding of your position. 

How does a tax inspection work?

HMRC carries out tax evasion investigations, or tax inspections, to recover any underpaid tax from individuals or corporations. Specialist teams of investigators will review your financial affairs to assess whether the correct amount of tax was paid.

Some tax inspections are launched due to suspicious behaviour or red flags; some investigations are triggered by whistle-blowing informers, who can contact HMRC through their website or via a dedicated hotline; some inspections are purely random. Whatever the circumstances, if you are investigated by HMRC, it can be a stressful and confusing time. Getting clear, practical advice is vital if you are to keep a cool head and make the right decisions for you and your business.

You should always seek to comply with the investigators as they conduct the tax inspection, while also ensuring you do not put yourself or your business at any unnecessary risk. We understand how tax inspections work and will advise you on the right steps to take at each stage of the proceedings. Making accurate, timely decisions will almost always result in a swifter, less disruptive process.

The way the inspection proceeds will vary from case to case: HMRC has wide powers and can upgrade a civil investigation to a criminal one if it believes that criminal sanctions are warranted, resulting in a lengthy, drawn-out process; in simple cases where inaccurate information has been provided to HMRC, accurate, decisive action can mean that the inspection is short and painless. 

What are the consequences of a tax evasion investigation?

A tax inspection can be highly disruptive to both your life and the operation of your business. The police may request a search warrant in an attempt to gather evidence from your home or business premises. Investigations may be made into your bank accounts, phone records, and travel history, as well as the records of your family and business contacts. Surveillance teams are sometimes used to monitor the actions of individuals and to enforce restraint orders placed upon particular activities.

Tax evasion is a serious offence, and the authorities will often press for the most severe penalties on conviction. Unpaid tax must be repaid, and significant fines are common. In serious cases, prison sentences can be handed down.

There may also be reputational consequences of public tax evasion proceedings, which can impact on your business’ ability to operate effectively. Where possible, we endeavour to avoid public proceedings and reduce the potentially damaging effect of such negative publicity. 

What is “failure to prevent facilitation of tax evasion”?

As well as your personal obligation to correctly satisfy your tax liability, you can also be liable to prosecution if your processes and procedures are not sufficiently robust to stop another person evading tax. The terms of the Criminal Finances Act 2017 mean that tax offences committed by employees or those providing services to a company can result in charges being made against you and your business, potentially resulting in heavy fines and reputational damage.

The best defence against these charges is to be prepared in advance. Our expert team can advise whether your current processes and procedures are fit for purpose. We also have experience building defence cases showing the procedures you had in place at the time any offences took place were sufficient.

If you are uncertain about what these obligations mean for your business, or need advice on engaging with providers of services to ensure you are protected if they commit tax fraud, contact us today.

Contact us

Lupton Fawcett’s team of Business and Financial Crime Solicitors are highly regarded for successfully defending businesses and individuals facing investigation or prosecution for all types of fraud offences.

If you are facing an investigation for tax evasion we can provide comprehensive support, specialist legal advice, and skilful representation.

Our team is led by Jeremy Scott who has 25 years’ experience of defending clients across the full spectrum of corporate and financial crime cases so you can rest assured that whatever the circumstance are, we’ll be able to help find the optimal outcome.

At such a critical time for the reputation and future of you and your business, it is imperative that you choose the right lawyers to advise and represent you. Lupton Fawcett, ranked in The Legal 500 for Regulatory Law, is known for winning cases that other firms would lose.

Part of a nationally recognised full-service law firm, we are able to assemble a multi-disciplinary team to support you through a criminal regulatory investigation or prosecution with the utmost care.

We also understand that business has to continue as, so our approach is always highly commercial, putting business continuity at the heart of our advice and representation whenever possible.

Within every area of law, we put your interests first.

Our Tax Fraud Defence Lawyers act regularly for corporate clients across England and Wales including Bradford, Birmingham, Hull, Leeds, Liverpool, London, Manchester, Sheffield, York, and Nottingham.

We can support your needs wherever you live in England or Wales

We will always respond promptly, and we will be happy to help.

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