What Happens When You Report Tax Evasion?
When you report tax evasion in the UK, you are helping to protect the integrity of the UK’s tax system. Tax evasion is a serious criminal offence that can result in serious financial penalties and even imprisonment. This is the reason why we will discuss the consequences of reporting tax evasion in the following blog post.
What Happens When You Report Tax Evasion?
When you report tax evasion in the UK, your allegations will be assessed and investigated by HM Revenue & Customs (HMRC). The investigation will involve a review of the evidence you provide to them and any other information they deem necessary. If the HMRC has sufficient evidence that tax fraud has taken place, then it will begin criminal proceedings against the alleged evader.
Criminal proceedings for tax evasion can lead to a number of different penalties, including large fines and even imprisonment. Depending on the severity of the case, the evader could face a fine of up to 200% of the amount of tax they owe, along with a possible jail sentence of up to seven years. In addition, HMRC will also investigate anyone who aided or abetted the evasion and may seek to recover any gains made as a result of the fraudulent activity.
HMRC will also use civil powers to collect any unpaid taxes and interest owed as a result of the evasion. This may include freezing bank accounts, confiscation of assets and even a public naming and shaming of those involved.
Reporting tax evasion is an important way of helping HMRC to identify, investigate and prosecute tax evaders. It includes the following situations:
- operating a business without informing HMRC
- not paying the correct amount of Income Tax or National Insurance
- not being registered for VAT when a business is required to do so
- not charging VAT or other taxes on goods or services being sold
- not paying VAT or other taxes on goods or services being purchased
- intentionally hiding money, shares or other assets in a bank account outside the UK
- any other type of tax avoidance or tax evasion
As such, anyone with information about suspected tax fraud should contact HMRC or their local police force as soon as possible.
How Can You Report Tax Evasion?
If you are aware of any activity that you believe may be a form of tax evasion, you can report it to HM Revenue & Customs (HMRC). You can do this in two ways:
- Report tax evasion online: You can use the HMRC website to report tax fraud or avoidance about a possible case of tax evasion anonymously. All you need to provide is your name, email address, and the details of the alleged fraud.
- Call the HMRC Fraud Hotline: You can also call the HMRC Fraud Hotline on 0800 788 887 to report potential tax evasion. You will need to provide your name and contact information, as well as details about the suspected fraud.
If you suspect that a company or individual is deliberately trying to avoid paying taxes, you should report them immediately. HMRC will investigate each case thoroughly and take appropriate action where necessary. Any information you provide to HMRC will remain confidential and your identity will not be disclosed by the authorities.
What Are The Penalties For Tax Evasion?
The penalties for tax evasion vary on the basis of the nature of the action taken by a tax evader. These can range from hefty fines to even a prison sentence. Some of these are explained on the basis of circumstances as follows:
- If someone is convicted of Income Tax evasion, they can be penalised for 6 months in jail or a fine of up to £5,000. Depending on the severity of the charge, the maximum penalty for income tax evasion that a tax evader in the UK can be charged with is seven years in prison or an unlimited fine.
- In the case of evasion of VAT, the penalty is either 6 months in jail or a fine of up to £20,000. In the case of the Crown Court, the penalty can be a maximum of seven years in prison or an unlimited fine.
- If someone is charged with cheating the public revenue, the penalty is life in prison or an unlimited fine.
- If someone is found guilty of providing false documentation to HMRC, they can be fined up to £20,000 or face up to 6 months in prison.
The above discussion helps to conclude that being a criminal offence, tax evasion has serious consequences for the culprit. If you know of someone committing tax evasion, you must report them to the HMRC without having to worry about your identity being disclosed to them.
Report tax fraud or avoidance to HMRC – GOV.UK
What Happens When You Report Someone For UK Tax Evasion? | Business Advice