Andersen on drop in prosecutions of tax evasion enablers

Date: 06 Mar 2023

Silvia Ricciardi

Andersen LLP comments on the UK seeing an 80 per cent drop in prosecutions of tax evasion enablers.

Miles Dean, Head of International Tax, and Des Hanna, International Tax Director at Andersen LLP comments on the UK seeing an 80 per cent drop in prosecutions of tax evasion enablers.

Miles Dean, who advises privately held multinational companies, entrepreneurs and high net worth individuals on a wide range of cross border tax issues, says: “The steep decline in prosecutions is yet another example of the havoc caused by the Government’s response to lockdown. HMRC shut down their service and like many institutions, didn’t do anything for nearly 2 years. It’s no surprise that there’s a backlog of enquiries.

HMRC has been hoisted by their own petard in this instance. It’s all well and good making grand claims about ramping up prosecutions but this is simply naive – in the same way George Osbourne claimed we would rake in billions from the Liechtenstein facilities, the reality was very very different.

We’re not a nation of tax evaders. It’s not in our psyche, so going after the high-hanging fruit was always going to be difficult, in fact it might be folly as it’s not realistic.”

Des Hanna, who has over 20 years of experience advising on UK and international tax issues, comments: “During Covid, this type of prosecution fell down the list of priorities and the fact that the courts were closed created a log jam. Then of course the investigators were further distracted into tracking down the Furlough Scheme payments that were fraudulently claimed. 

Some departments within HMRC seem to be suffering from resourcing issues and the need to deploy specialist staff in areas where the greatest tax receipts from enquiries can be generated. Furthermore, as we already know HMRC seems to be suffering generally from lethargy (after Covid), so it will likely be some time before we see these types of prosecutions increase.”

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