It is no secret that the vast majority of onshore PAYE Umbrella Companies have little time for those who wish to evade tax; however, according to the law firm Pinsent Masons, politicians and media outlets may have been over-hyping the extent of the problem.
The firm has obtained figures from HMRC revealing that the number of suspected tax evasion cases investigated by its local teams dropped by 16% between 2011-2012 and 2012-2013, tumbling from 3,456 cases to 2,888. The numbers appeared to fly in the face of a growing popular perception that such cases are multiplying.
Tax expert Phil Berwick, a partner at Pinsent Masons, said: “This decline in suspected tax evasion doesn’t tally with the rhetoric from some quarters that the British economy is being undermined by a chronic under-collection of tax revenues. HMRC has plenty of tools at its disposal to catch tax evaders, which serves as a huge deterrent to those considering tax evasion. A fall in serious tax evasion cases being identified is definitely not down to any waning of HMRC’s determination to pursue tax evasion. Some of the speculation about tax evasion is a little over the top.”
The Revenue defines ‘serious evasion’ as cases involving disputed tax in excess of £50,000. It has accrued a raft of new powers in recent years to tackle the problem, including the right to slam individuals who fail to declare hidden capital gains or income tax with penalties as high as 200% of the tax owed.
The message, however, is a simple one: HMRC is continuing to pursue tax evasion assiduously and has extra resources to do so.