CASES of serious tax evasion detected by UK authorities have hit their lowest level in five years, amid increasing global efforts to crack down on tax evaders.
Law firm Pinsent Masons said suspected evasion cases have plunged 36 per cent from their peak in 2010-11 to March this year, according to figures obtained from tax collector HM Revenue & Customs (HMRC).
Year on year, it fell 16 per cent, with HMRC pursuing 2,888 cases for the year ending March down from 3,456 in the previous year.
The numbers come as politicians ramp up action on evasion and authorities are given new powers to chase down suspected tax dodgers. Pinsent Masons partner Phil Berwick said the two were in contrast. “This decline in suspected tax evasion doesn’t tally with the rhetoric from some quarters that the British economy is being undermined by a chronic under-collection of tax revenues,” he said.
Serious tax evasion is classified by HMRC as cases where over £50,000 of tax is suspected to have been kept away from the state’s coffers illegally.
David Cameron last week used the high profile G8 summit as a platform to push plans to combat tax avoidance and evasion, including unmasking the ultimate owners of shell companies and fostering more co-operation with other tax authorities.
HMRC has been handed a raft of new powers over the past five years to help drive down the practice, including the introduction of 2,500 new tax inspects, an increase in budgets and the creation of new task forces.
“International co-operation has been stepped up significantly as HMRC has striven to curb tax evasion,” Berwick added. “Tax evaders are now realising that HMRC has a much greater ability to tackle evasion, even if individuals conceal their assets abroad.”
HMRC said in a statement it was committed to increasing prosecutions five-fold. “HMRC has been given almost £1bn to tackle evasion, fraud and avoidance,” it said.