It is noteworthy that HMRC is pursuing a criminal prosecution against Bernie Ecclestone in relation to his alleged tax evasion. HMRC prosecutes in only a minority of tax fraud cases, even though increasing international co-operation provides it with unprecedented amounts of information which facilitates the crackdown on offshore non-compliance.
HMRC generally uses civil fraud investigation rather than criminal prosecution. This is because there’s a strong financial incentive to use civil measures. HMRC can recover liabilities going back 20 years and penalties up to 200 per cent of the tax evaded, in addition to the tax itself and interest.
Also, HMRC only has to show that it is more likely than not that the individual acted deliberately. In the criminal court they must prove their case beyond reasonable doubt.
Finally, civil investigations involve less time, resources and cost.
As a matter of policy, HMRC prosecutes only where there is a need for a strong deterrent message or only a criminal sanction is appropriate. This includes “where deliberate concealment, … is suspected”.
HMRC’s comments indicate that Mr Ecclestone is being prosecuted under this category. The prosecution of such a high profile figure aligns with HMRC’s policy of sending a strong deterrent message: that no-one is above the law.