Crown Prosecution Service launches crackdown on middle-class tax evaders

Prosecutors to increase cases pursued and no longer treat fraud as a victimless crime

Thousands more middle-class tax evaders will face criminal prosecution and jail after the Crown Prosecution Service (CPS) indicated it would no longer treat tax fraud as a “victimless crime”.

Keir Starmer, the director of Public Prosecutions, will today promise to “ramp up” the number of cases it pursues by five-fold over the next two years.

Smaller-scale tax cheats with no previous convictions – including homeowners who don’t declare their rental incomes and white-collar professionals who invest in evasion schemes – will be targeted as the CPS is determined to maximise the deterrent effect of prosecutions.

In 2010 there were just 200 convictions for tax evasion despite an estimated cost of such fraud of £14bn a year. In a speech Mr Starmer is expected to say that such a lax enforcement is not acceptable in a time of economic hardship. “Tax evasion has to be dealt with robustly all the time. But in a recession, when ordinary  law-abiding taxpayers are suffering real hardship, the need to deter, detect and prosecute those who evade tax is greater than ever,” he will say.

Mr Starmer will add that it is a  “long-standing myth” that tax evasion is a victimless crime. “Many would be outraged if money was stolen from their personal bank accounts. So let us work out the cost to every family and every adult in the UK of tax evasion.

“The latest estimate by HMRC suggests that tax evasion costs the UK economy £14bn a year. That is the equivalent of £530 from every household, or £ 769 per family. A victimless crime? This is money that could have been spent on schools, hospitals, firefighters, police and public services.”

Much of the burden of prosecutions is likely to fall on HMRC, which has been given an additional £1bn to tackle tax evasion, fraud and avoidance.

But Mr Starmer will say that many cases of illegality will now be forcefully pursued and that senior judges had made it clear that when it comes to large-scale tax evasion, even those without previous convictions can expect significant custodial sentences.

A spokesman for HMRC said: “The vast majority of taxpayers are honest and pay what they have to under the law. They rightly expect us to tackle the small minority of cheats who deprive the country of vital revenues and we are using every penny of our additional resources tackle the cheats.”

Meanwhile, HMRC has also stepped up investigations into the way international firms can avoid paying tax by moving profits between different countries. HMRC’s Large Business Service, which investigates 770 of the biggest companies, is now investigating £1bn of tax linked to transfer-pricing issues, up 47 per cent up from £680m in 2011.

MPs also plan to question representatives of the biggest accounting firms over their role in helping big companies minimise their tax bills.

A spokesman for the Public Accounts Committee said it would hold a hearing on 31 January, at which senior tax specialists from PricewaterhouseCoopers (PwC), Ernst and Young, KPMG, and Deloitte would testify. The firms are likely to face a hostile grilling which could be damaging for the firms.

Start your day with The Independent, sign up for daily news emails
Voices
Barn owls are among species that could be affected
charity appeal
News
Sarah Silverman (middle) with sister Reform Rabbi Susan Silverman (right) and sister actress Laura Silverman (left) at Jerusalem's Western Wall for feminist Hanuka candle-lighting ceremony
peopleControversial comedian stages pro-equality Hanukkah lighting during a protest at Jerusalem's Wailing Wall
Arts and Entertainment
The Bach Choir has been crowned the inaugural winner of Sky Arts’ show The Great Culture Quiz
arts + ents140-year-old choir declared winner of Sky Arts' 'The Great Culture Quiz'
Sport
After another poor series in Sri Lanka, Alastair Cook claimed all players go through a lean period
cricketEoin Morgan reportedly to take over ODI captaincy
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?

Day In a Page

Homeless Veterans appeal: 'You look for someone who's an inspiration and try to be like them'

Homeless Veterans appeal

In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
Could cannabis oil reverse the effects of cancer?

Could cannabis oil reverse effects of cancer?

As a film following six patients receiving the controversial treatment is released, Kate Hilpern uncovers a very slippery issue
The Interview movie review: You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here

The Interview movie review

You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here
Serial mania has propelled podcasts into the cultural mainstream

How podcasts became mainstream

People have consumed gripping armchair investigation Serial with a relish typically reserved for box-set binges
Jesus Christ has become an unlikely pin-up for hipster marketing companies

Jesus Christ has become an unlikely pin-up

Kevin Lee Light, aka "Jesus", is the newest client of creative agency Mother while rival agency Anomaly has launched Sexy Jesus, depicting the Messiah in a series of Athena-style poses
Rosetta space mission voted most important scientific breakthrough of 2014

A memorable year for science – if not for mice

The most important scientific breakthroughs of 2014
Christmas cocktails to make you merry: From eggnog to Brown Betty and Rum Bumpo

Christmas cocktails to make you merry

Mulled wine is an essential seasonal treat. But now drinkers are rediscovering other traditional festive tipples. Angela Clutton raises a glass to Christmas cocktails
5 best activity trackers

Fitness technology: 5 best activity trackers

Up the ante in your regimen and change the habits of a lifetime with this wearable tech
Paul Scholes column: It's a little-known fact, but I have played one of the seven dwarves

Paul Scholes column

It's a little-known fact, but I have played one of the seven dwarves
Fifa's travelling circus once again steals limelight from real stars

Fifa's travelling circus once again steals limelight from real stars

Club World Cup kicked into the long grass by the continued farce surrounding Blatter, Garcia, Russia and Qatar
Frank Warren column: 2014 – boxing is back and winning new fans

Frank Warren: Boxing is back and winning new fans

2014 proves it's now one of sport's biggest hitters again
Jeb Bush vs Hillary Clinton: The power dynamics of the two first families

Jeb Bush vs Hillary Clinton

Karen Tumulty explores the power dynamics of the two first families
Stockholm is rivalling Silicon Valley with a hotbed of technology start-ups

Stockholm is rivalling Silicon Valley

The Swedish capital is home to two of the most popular video games in the world, as well as thousands of technology start-ups worth hundreds of millions of pounds – and it's all happened since 2009
Did Japanese workers really get their symbols mixed up and display Santa on a crucifix?

Crucified Santa: Urban myth refuses to die

The story goes that Japanese store workers created a life-size effigy of a smiling "Father Kurisumasu" attached to a facsimile of Our Lord's final instrument of torture
Jennifer Saunders and Kate Moss join David Walliams on set for TV adaptation of The Boy in the Dress

The Boy in the Dress: On set with the stars

Walliams' story about a boy who goes to school in a dress will be shown this Christmas