Money generated from serious criminal tax investigations by HRMC soared to almost one billion pounds last year, or more than a 1000% increase from the previous year, according to analysis from Pinsent Masons.
HMRC brought in £991 million in the year to April 2024 from these so-called 'last-chance saloon' or Code of Practice 9 fraud cases, up from just £89 million in the previous twelve months, said the law firm.
Ian Robotham, Legal Director at Pinsent Masons, said CoP9 allows taxpayers to come forward, admit to fraud and pay all their outstanding tax, penalties and interest.
In exchange, the taxpayer can avoid a criminal investigation and a potential prison sentence, albeit HMRC can still prosecute if it is given false or misleading information.
Robotham added: “The new Government has set itself ambitious targets for taking in extra revenue from tackling tax avoidance and evasion so we should more of these investigations in the future.”
“Taxpayers must take COP9 investigations very seriously. Complying with these HMRC investigations can significantly reduce the punishment – but the taxpayer must give an accurate, open and honest disclosure of the tax they haven’t paid.”
Two-thirds of the CoP9 cash came from Bernie Ecclestone, the former owner of Formula One who coughed up £653 million alone.
Even without Ecclestone, HMRC’s COP9 income hit £338 million in 2023/4 – a nearly 400% increase on the previous year noted the lawyer.
Yields from the second most serious non-criminal investigations (CoP8) by HMRC also increased, up in 2023/4 to £83.2 million from £72.4 million – a 15% rise.
These ‘COP8’ investigations focus on those tax avoidance schemes said Pinsent Masons.