CPS to target middle classes

The Crown Prosecution Service (CPS) will join forces with HMRC in a bid to crack down on the promotion of aggressive tax avoidance schemes and the professionals who invest in them.

That’s the message from the CPS which is set to increase by fivefold the number of tax evasion cases it takes on to 1,500 by 2015, according to Keir Starmer, the director of public prosecutions.

In an interview with the FT, the CPS chief said “it is intended that we will select cases to send a clear message as to the breadth of our coverage”. The CPS secured some 200 tax convictions in 2010, with an 86% success rate.

Starmer’s announcement echoes a greater governmental and societal push to track down and punish legal tax evasion by corporates such as Facebook, Starbucks and Google as well as TV celebrities like Jimmy Carr.

He will formally outline the new CPS approach on Tuesday 22 January and stresses that tax evasion is far from a victimless crime, and actually costs every UK household over £500 a year.

In his speech, to be given tomorrow evening, Starmer is set to say: ‘Tax evasion has to be dealt with robustly all the time. But in a recession, when ordinary law-abiding tax payers are suffering real hardship, the need to deter, detect and prosecute those who evade tax is greater than ever.

‘There is a longstanding myth that unlike many other offences that the Crown Prosecution Service has to deal with, tax evasion is a victimless crime. But many would be outraged if money was stolen from their personal bank accounts. So let us work out the cost to every family and every adult in the UK of tax evasion.

‘The latest estimate by HMRC suggests that tax evasion costs the UK economy £14bn a year. That is the equivalent of £530 from every household, or £ 769 per family. A victimless crime? This is money that could have been spent on schools, hospitals, fire-fighters, police and public services.’

The CPS says the new attack on tax evasion is possible due to the strengthened fraud prosecution capability following its merger with the Revenue and Customs Prosecutions Office.

It also points to the fact that “senior judges have made it clear that when it comes to large-scale tax evasion, even those without previous convictions can expect significant custodial sentences".

The assault on middle class tax evaders marks the latest ‘get tough’ strategy by the authorities as they continue to probe over £1bn of UK taxes that may have been avoided by the transferring pricing tactics employed by multinationals.