Life in the Black Economy May Bring Prison

Posted: 12th March 2011

The view HM Revenue and Customs (HMRC) take on members of the ‘black economy’ is well known to be harsh, but the strength of their animosity to petty tax evaders is illustrated by a recent criminal prosecution which may lead to a man being imprisoned for four years.
The man ‘moonlighted’ for several years. He had never informed HMRC of his business activities and did not make tax returns. He was investigated by HMRC and tax of about £3,500 was charged. However, HMRC did not stop at collecting the unpaid tax plus penalties, they also prosecuted him for tax evasion, which was ‘plea-bargained’ down to the common-law offence of cheating the Revenue. After obtaining the conviction, they sought an asset confiscation order under the Proceeds of Crime Act 2002, to confiscate the ‘criminal assets’.
An order was imposed – for £700,000. Failure to pay will bring a prison sentence of four years. Although this seems wildly excessive for what appeared to be a minor offence, the decision was upheld by the Court of Appeal.

If you are investigated by HMRC, it is sensible to obtain legal representation as soon as possible