NCA’s Annual Report 2019-20: a focus on recovering the proceeds of crime and asset denial
News this week that David Beckham was only prevented from being approved a knighthood in 2014 due to a last minute intervention by HMRC is further evidence of the political and social stigma that surrounds tax avoidance. The “Red Flag” blocking the honour was purportedly raised on the grounds that the ex-England captain had been involved in a controversial but lawful tax avoidance scheme. Whilst Beckham hopes he will be removed from the HMRC blacklist as the result of on-going court action by investment firm Ingenious Media (which maintains Beckham and others were investing in a legal, scheme, that had in fact been approved by the Government), HMRC’s intervention is symbolic of the overarching strategy to stop Britain’s wealthiest individuals and companies “getting away” with tax avoidance.
However, HMRC are not only clamping down on lawful tax avoidance. The Revenue has also pledged to criminally prosecute “100 wealthy corporates and individuals” for tax evasion by 2020. A trebling in the number of prosecutions over the last 5 years suggests that HMRC is going in the right direction to hit its targets. Successes include the convictions of several individuals involved in film tax investments schemes including accountants, financial advisors as well as scheme promoters and investors who now face lengthy custodial sentences. HMRC’s aggressive approach has been further supplemented by new legislation coming into force this year including a “strict liability” offence for off-shore tax evasion and a corporate offence of failure to prevent the facilitation of tax evasion.
Despite the renewed focus and seemingly improved figures, a report last month by the Public Accounts Committee criticised HMRC’s “dismal record” in prosecuting high-net worth individuals for tax fraud. The report concluded that HMRC is failing to properly pursue Britain’s wealthiest people, potentially undermining confidence in the whole system. What is concerning is that pressure and promises to prosecute high-profile individuals and companies may well result in cases being pursued criminally when a civil penalty or settlement would be a more appropriate option. Whilst the pursuit of big ticket prosecutions against wealthy individuals will create headlines, it ignores practical and financial realities and is potentially a false economy: Criminal cases take longer, are more resource intensive and do not guarantee any financial return at the end.
Whilst Beckham may well feel that HMRC’s involvement led to him missing out on his knighthood, other high-net worth individuals are facing HMRC intervention of a very different kind.
If you have any questions regarding this blog, please contact David Sleight . Please visit our Tax Investigations web page if you would like further information regarding this topic , or our Criminal Litigation page.
Skip to content Home About Us Insights Services Contact Accessibility