The Consequences Of Tax Evasion In The UK

It is the job of the HM Revenue & Customs office, otherwise known as HMRC, to collect taxes from United Kingdom citizens, and it also will monitor tax payments to ensure compliance. If the HMRC has reason to believe that you may be evading payment of taxes, an investigation will be initiated, and you may face a number of consequences. As a resident of the United Kingdom, it is important to understand this process and the possible penalties.

The Investigation
The HMRC may conduct periodic checks of citizens to ensure compliance with taxation laws, and through these checks, the HMRC may determine that evidence is present indicating tax fraud or evasion. In other cases, a concerned citizen may provide the HMRC a tip that will instigate the investigative process. The investigative process involves the HMRC contacting you directly, and you may choose to comply and participate with the investigation or not. However, the investigation will proceed without your participation. Because of this, it may be in your best interest to work with the HMRC and to provide all documents and supporting evidence requested in a timely manner. Keep in mind that you are permitted to have professional representation during any meetings with the HMRC.

The Process
If your tax payment status is investigated by the HMRC, you may be asked to provide supporting documents or to prepare a disclosure statement to corroborate the amount of taxes that you paid. The HMRC may conduct its own investigation as well, and it may review your tax documents, receipts, bank statements and other financial data. The process may involve several meetings and hearings. Ultimately, the HMRC may determine that evasion did not occur, or you may be required to pay additional taxes. If additional taxes are owed, you may also need to pay interest charges and penalties.

The Consequences
The consequences of tax evasion in the United Kingdom can be damaging in a number of ways. Because those who are caught evading taxes must pay interest charges and penalties on the taxes originally due, there is considerable financial expense associated with this. In addition, many people will choose to pay for professional representation during this process, and there is cost associated with this. The names of those who are caught evading taxes will be published, and there may be an element of public humiliation that a tax evader will be forced to deal with. In addition, some cases of tax evasion may result in criminal charges, and this may cause the guilty party to face additional legal issues. As a final note, those who are caught evading taxes in the United Kingdom often will have their tax returns reviewed more carefully by the HMRC in the future, so there will be added pressure on the individual to ensure that their tax returns are filed truthfully and accurately.

Tax evasion is a serious matter in the United Kingdom, and it can have costly and long-term consequences on your life. The HMRC may be more lenient on those who come forward with their actions or who comply with investigations.

Sally is a content specialist for Francis Clark Tax Consultancy, a business based in South West England who provide tax consultancy services to over 400 firms, visit to find out more.