Case Studies: Tax Evasion/Fraud

Small single-site retailer subject to penalty by HMRC

Our client

Small single site retailer.

The situation

HMRC uncovered non-duty paid cigarettes hidden under the floor in an inspection. The retailer agreed that duty was payable, and VAT on sales. However, HMRC argued that the penalties should be based on ‘deliberate and concealed’ behaviour, which carries a higher penalty rate. inTAX argued that ‘deliberate and concealed’ rather than ‘deliberate’ does not refer to the concealment of the cigarettes, but rather to falsification of paperwork, for example, and which had not occurred in this case.

The outcome we achieved

After inTAX’s robust argument, HMRC reluctantly, but correctly, agreed that the penalties were only ‘deliberate’ saving the client c£30k in additional penalties.

Fraud enquiry on the alleged discovery of an ‘offshore account’

Our client

Sole trader dealing in used vehicles.

The situation

HMRC commenced a fraud enquiry on the alleged discovery of an alleged ‘offshore’ account. HMRC issued assessments of over £100k with penalties across a number of years. The sole trader represented themselves at Tribunal and unfortunately lost since they were unable to articulate a detailed argument in support of their own position. inTAX was appointed and persuaded HMRC to accept a late appeal on years that had not been decided in Tribunal. During the appeal process, HMRC made a number of serious errors. inTax made a complaint and secured compensation for the additional unnecessary fees incurred.

The outcome we achieved

HMRC withdrew the assessments and repaid the sums that had already been decided by the tribunal, saving the client £60k and getting them a further repayment of £25k. HMRC also agreed to pay compensation of £4k for the errors.

Stock market dealer who had trade commissions banked offshore and not declared

Our client

Stock market dealer, c£250k income per annum.

The situation

HMRC commenced a fraud enquiry because of trade commissions banked offshore and not declared. Whereas there were some errors made, they were not to the extent alleged. The client’s previous adviser had missed time limits for appealing against HMRC assessments and had left the case for over a year without taking any action. On engagement, inTAX dealt with HMRC’s solicitors office and the inspector, which resulted in HMRC accepting a late appeal.

The outcome we achieved

On provision of detailed analysis, HMRC agreed with the proposed position on additional income. HMRC amended assessments of £350k to £60k.