HMRC prosecutions up by a third, with more to come

Prosecutions rose from 617 to 795 during the last tax year, a rise of 29 per cent. However, for HMRC to reach its intended target – 1,165 prosecutions – it will have to see that figure jump by at least 46 per cent.

Tax evasion is said to cost the UK £35bn a year, much of that money legally stored offshore, or which went undeclared. £119.4 bn of UK tax went unpaid, avoided or evaded in the 2013-14 financial year.

In 2010, the government put in £1bn for HMRC to empower its prosecution operations.

In August, HMRC announced that it would make it a criminal offence to hide money offshore.

In order to be prosecuted, an individual would only have to be found in possession taxable but undeclared income.

David Gauke, the financial secretary to the Treasury, said: “Following the government’s 2010 spending review commitment to invest an additional £1bn into HMRC, criminal prosecutions for tax evasion have increased fivefold.

“These figures send a clear message that we will not put up with tax evasion.”

The plans are under consultation until the end of the month.

Of the Reuters report, Emma Nendick, head of tax at Thomson Reuters, said: “Criminal records and prison sentences are not just an idle threat. In fact the increasing volume of criminal prosecutions is one of the measures by which HMRC now judges its success.”

It is likely given the substantial number required to fulfil the target, HMRC will push for further tax reform to capture tax evaders.

Gauke said: “We’re determined to bring the small minority who break the law to cheat on their tax to justice.”