Criminal prosecution
in relation to tax offences is rare. Every year HMRC carry out
around 250,000 tax enquiries of which less than 100 will result in
prosecution.
The Taxes Management
Act (1970) provides a regime of civil penalties which cover both
fraudulent and negligent conduct. As a matter of policy HMRC
usually take the view that the powers they have to collect tax,
interest and penalties are more cost effective than criminal
prosecution, and that they provide a sufficient deterrent and
ensure adequate restitution for the unpaid tax. If necessary the
penalties can be enforced through the courts and ultimately lead to
seizure of goods and bankruptcy. But this is through civil and not
criminal proceedings.
There are
circumstances where they will prosecute. The main ones
being:
-
High profile figures in a position of
responsibility - e.g. MP's or judges
-
Accountants or lawyers involved in
money-laundering
-
Where there are links to criminal gangs
or organised frauds
-
Previous offenders - Lester Piggott was
prosecuted after his third civil tax
investigation
-
Where forged documents are
used
-
Where the publicity might prove a major
deterrent - there are persistent rumours that a Premiership
footballer might be prosecuted for tax evasion, although HMRC are
slightly more wary of prosecuting celebrities following the
acquittal of Ken Dodd.
There are in fact very
few income tax or national insurance offences which constitute
criminal offences. The main ones are fraudulent tax evasion (S144
Finance Act 2000), theft, false accounting, cheating HMRC and
obtaining a pecuniary advantage by deception. There are also some
obscure criminal offences involving international companies failing
to get Treasury consent for share issues. However failing to
register for income tax, not sending in your tax return on time or
failing to pay your tax on time are not in themselves criminal
offences - they are covered by the civil penalty
regime.
Impersonating a tax
inspector used to be a criminal offence punishable by
transportation, but the punishment was repealed. Probably the
Australians got fed up with Tasmania being over-run with Inland
Revenue impersonators.
There are more
criminal offences under the VAT regime, where even innocent errors
can be prosecuted. However the policy is again to treat the vast
majority of VAT regulatory offences under the civil procedures. In
any case VAT is not usually a concern for most
escorts.
HMRC have confirmed to
the accountancy profession that the advent of the money laundering
offences and the reporting rules imposed by the Money Laundering
Regulations has not changed their long established policy towards
prosecution.
And it's easy to tell
whether you're likely to be prosecuted. You'll be interviewed under
caution "You have the right to remain silent but it may harm your
defence...."I am not aware of any
cases where an escort has been prosecuted for tax evasion. That is
not to say that sex- workers have not been charged with tax evasion
where they have also been charged with a number of other serious
offences involving organised (or even disorganised)
crime.
1. Do-it-Yourself
