LayerSlider – Conveyancing 26Jan18 – Base

Tattle Tale Taxes

You are being watched

The HMRC have started campaigning to warn individuals with undeclared income that they are clamping down. They’re latest drive, which is the first phase of a three year advertising campaign in the UK, displays the tagline ‘We’re closing in’ and warns that you must declare your income before they ‘catch you.’ Figures from the department do seem to back up their claims as they boasted:

‘In the last three years, we have prosecuted 2,343 individuals, including some very high-profile barristers, accountants and lawyers, securing a collective total of 2,500 years in custodial sentences,’ HMRC said. ‘A total of 540 people were convicted of tax evasion in 2012/13 and we are on target to bring at least 1,165 tax fraud prosecutions in 2014/15, up from 165 in 2010/11.’ ¹

In order to dispel any thoughts of inequality HMRC have made it clear that there will be no exclusions, stating they will find you ‘no matter who you are.’ The main message from the HMRC campaign is prevention rather than prosecution however and they would prefer people  fess up rather than be caught out. The incentive for honesty is reduced penalties and restrictions on the period open to enquiry.²

Whistle-blowing in a Divorce

One way in which the HRMC find offenders is by paying whistle-blowers and last year nearly £375,000 was paid out for information that led to tax being collected. The rewards are decided on a case by case basis depending on the collected amount and interestingly most whistle-blowers are either former employee’s or former spouses of the offender.³

As tempting as it may be to bring up this type of activity during a divorce it is not always the best course of action for either party for the following reasons:

    • The divorce proceedings will be slowed down.
    • HMRC are unlikely to pay out a significant reward for somebody who was married to the tax offender at the time of offence.
    • The offender may not be able to cover maintenance payments in the future.
    • It may lead to an investigation into both parties.
    • Relations will be further strained.

All cases can vary but generally the best course of action for this type of situation is voluntary disclosure from the offender. A stern message delivered through a solicitor requesting that the offender gets their tax affairs in order before proceedings take place can be a safer, less confrontational approach which may benefit everyone in the long run.

Speak to us

MKB Law are the leading solicitors in Matrimonial and Family Law in Belfast. If you need to speak to a solicitor regarding a matter relating to divorce or any area of Matrimonial Law contact MKB Law today.

Phone Number: 02890242450     Email: info@mkblaw.co.uk

References

1. Tax Journal > 2014 > Issue 1201, 24 January > News > News – Tax Journal, Issue 1201, 2

2. Taxation Magazine > 2013 Volume 172 > Issue 4430, 28 November 2013 > Articles > The net is closing – Taxation, 28 November 2013, 11

3. Taxation Magazine > 2014 Volume 173 > Issue 4445, 27 March 2014 > Articles > A kick in the taxes? – Taxation, 27 March 2014, 17

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