According to a spokesperson for the CPS, the Crown Prosecution Service, most of us pay our taxes and pay on time. Figures from HMRC suggest that in 2011-2012, 93% of tax due was paid.
However, the CPS recognises that there are people who dishonestly and fraudulently evade tax. They choose to hide their income and wealth to evade tax, claim tax relief to which they are not entitled and subvert the tax and excise systems to make money for themselves. They are criminals and, like other fraudsters, they are dishonest and motivated by greed. Their criminal activity may be less visible than other more familiar criminal activity, such as burglary, robbery or simple theft, but they belong in the same category of criminals.
The CPS view is that tax evasion has to be dealt with robustly all the time. But in a recession, when ordinary law-abiding tax payers are suffering real hardship, the need to deter, detect and prosecute those who evade tax is greater than ever.
The myth that tax evasion is a victimless crime is usually perpetuated by those who think that getting one over the tax man is, even if not entirely honest, nonetheless secretly to be admired.
A recent estimate by HMRC suggests that tax evasion costs the UK economy £14 billion a year. That is the equivalent of £530 from every household, or £769 per family. This is not victimless crime. This is money that could have been spent on schools, hospitals, fire-fighters, police and public services.
The "top tax criminals of 2012″ - a list of 32 individuals published by HMRC, taken together, are now serving a total of over 150 years imprisonment. In 2011, HMRC estimated that criminal cases prevented the loss to the Revenue of around £1 billion, described by the CPS as enough to fund:
- 196,752 pupils in full time education (at £5082.53 per pupil)
- 18 additional Great Ormond Street Hospitals (1 = £53.2m per year) or
- 34,247 fire fighters (at £29,199 each per year)
The same calculations can be done for the overall sum of £14 billion stolen from the taxpayer in tax evasion every year. That money cannot be spent on schools, hospitals, fire-fighters, police and public services.
The criminal justice response to tax evasion is being ramped up and senior judges have made it clear that when it comes to large scale tax evasion, even those without previous convictions can expect significant custodial sentences.
Tax evasion is not a "fiddle" in some sort of legal grey area. It is ordinary fraud involving dishonesty and greed, and we all pay for it. The criminals who perpetuate tax fraud may be our neighbours, our friends, the people we talk to on the bus, or even seemingly esteemed professionals, but their gain is our loss. And at the heart of any complex fraud is one simple notion and something that any jury member can understand - dishonesty.