VAT fraud, also called tax avoidance fraud, is a serious offence which could land you in prison. There are a number of reasons why you could be accused of VAT fraud in the UK, and many people who find themselves in this situation have simply overlooked reporting their income to HMRC.
If you have received a letter from HMRC accusing you of VAT fraud, it’s vital that you consider your approach carefully, as HMRC now have more powers to find information about your financial affairs than ever before. In the early stages, and if a mistake has been made, your accountant will usually be able to sort this out for you. But if you are prosecuted or become the subject of a criminal enquiry, it’s vital to seek legal advice as soon as possible, as you’ll need someone who knows the law in depth to defend you against HMRC’s claims.
If you’re found guilty of tax evasion, you will be expected to pay back every penny of the tax you owe. You may also be prosecuted under the Proceeds of Crime Act 2002 and the Money Laundering Act 2007.
Keep in mind that, if you are found guilty of money laundering, you possessions may be confiscated. This includes any property you own.
Facts about tax evasion
- If you’re prosecuted for owing £25,000 or more in tax avoidance, HMRC is legally allowed to ‘name and shame’ you and your company.
- Companies that have come under fire for tax evasion include Starbucks, Google and Amazon.
- Offshore tax havens are a growing problem. One building in the Caribbean Cayman Islands is the official location of 18,857 companies.