The Inland Revenue and the Criminal Law

Publication Date01 November 1989
Date01 November 1989
DOI10.1177/002201838905300407
AuthorRobert Rhodes
SubjectArticle
THE
INLAND
REVENUE
AND
THE
CRIMINAL
LAW
Robert Rhodes, Q.c.
Introduction
Unlike prosecuting authorities such as the Crown Prosecution
Service, the Inland Revenue regards its primary function not as
being to prosecute but to collect revenue.
It
has powers to
obtain civil penalties of up to 200% in cases of tax fraud, although
it is exceptional for the Inland Revenue to demand more than a
100% penalty. In practice, where taxpayers are prosecuted, the
Inland Revenue will not seek penalties save in very restricted and
exceptional cases.
The Decision to Prosecute
The Inland Revenue regards it as essential to prosecute some
examples of all classes of tax fraud. The Inland Revenue claimed
in evidence to the Committee on Enforcement Powers of the
Revenue Departments ("the Keith Committee") that that policy
was essential because it was the possibility of prosecution which
prevented the spread of tax fraud to unacceptable limits. The
Keith Committee (Cmmnd 8822) accepted that assertion.
In selecting potential prosecution cases, the Revenue willgener-
ally look for what it describes as "badges of heinousness". Those
are: where the taxpayer under suspicion is himself a professional
adviser on tax matters;
where there is evidence of collusion between the taxpayer
and others to defraud the Revenue;
where there is evidence that documents have been forged
with intent to deceive the Revenue;
where the taxpayer fails to respond to the Inspector of Taxes'
challenge by disclosing irregularities of which the Revenue
already has knowledge;
477

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