Defending Tax Fraud Prosecutions

Daniel Godden, BSQ partner and white collar crime specialist spells out your options and comments on the changing landscape of HMRC and fraud prosecutions.

“The most common problems arise when your local tax office has a query about a tax or VAT return. Usually your accountant will be your first port of call. But when it gets complicated I’m asked to step in” explains Daniel.

”As government agencies respond to political and public pressure to crackdown on fraud and tax evasion, we are seeing an uptick in tax investigations and prosecutions.  It’s no surprise in the current climate that HMRC is taking a tough line on cases of suspected evasion or fraud”

Complications can arise when the tax authorities are threatening a criminal prosecution rather than seeking a civil settlement. Civil settlements can take the form of a COP 9 agreement in tandem with a contractual disclosure facility (CDF) where the HMRC agrees not to start criminal proceedings for an alleged fraud if in return the taxpayer makes full disclosure. HMRC can re-open tax assessments going back 20 years and can ask for the tax due, interest and impose additional financial penalties. Any material errors or false statements when co-operating could result in prosecution.

“HMRC have their own guidelines as to when a COP9/CDF is appropriate.  What we’ve noticed recently is that the authorities are less willing than before to use this procedure particularly if they are investigating tax avoidance schemes.”

If HMRC are thinking of a prosecution, one of the first thing they will do is ask the person concerned to attend an interview under caution.  White collar crime specialists like Daniel have extensive experience of representing individuals at interviews under caution, which are conducted according to the procedure set out in the Police and Criminal Evidence Act 1984.

tax-fraud-lawyer

“I’ve conducted many, maybe hundreds of these types of interviews” says Daniel. “They provide an opportunity for us to assess the strengths and weaknesses of a case and decide if there is any possibility of persuading the authorities to discontinue an investigation. In the past we have managed to achieve this by pointing out the flaws and weaknesses in the evidence.”

Notable pre-charge interventions include the case of S who was wanted by the HMRC for his involvement in a film financing tax arrangement.  Following Daniel's intervention, the authorities abandoned their efforts to extradite him to the UK.

 

 

These types of tax avoidance schemes are one of Daniel's specialist areas although he has represented clients across the whole spectrum of tax and fraud enquiries including VAT and excise fraud allegations. Based on recent experience Daniel thinks more HMRC prosecutions and investigations are likely. 

“the fallout from the Panama papers scandal means that HMRC is now flush with data released from foreign jurisdictions with details of UK taxpayers undeclared income and assets located abroad. They’re looking to make an example of someone.”     

Daniel also says it is important to keep in mind that in 2013 the Director of Public Prosecutions announced that the authorities would be targeting 'sophisticated investors' rather than simply the promoters or designers of tax avoidance schemes. “I’m currently representing an individual in the first test case where an investor alone has been targeted for this reason.” 

“Proving dishonesty to the criminal standard is very difficult in these type of cases – and it’s my job to make sure that the Crown Prosecution Service have a mountain to climb if they try.”
— Daniel Godden

Daniel can’t say more about the case which industry experts are following closely but he remains upbeat about the outcome.
 

Daniel's CV refers to his entry in the Legal 500 as a ‘fantastic lawyer’ who is ‘first rate’ with ‘encyclopaedic knowledge’. Past clients have also been glowing in their praise for him. 

Dear Daniel, I wanted to formally thank you for your amazing help and skilled conduct of my defence against the charges I faced concerning the Montpelier Contract for Difference. You were extremely kind and helpful, always ready to answer my questions and to reassure me when appropriate. You had a calm countenance and a very confident approach, both of which made me feel that you would be able to win the case for me.

I genuinely believe that I could not have found a better solicitor and your skills as a criminal lawyer are very obvious. The choice of counsel that we made together was excellent and I would never, of course, have had access to Charles Bott without your connections and good standing at Carmelite Chambers.

As you know, being prosecuted by the CPS caused me immense stress over a long period of time and the relief that I now feel is unimaginable. I truly believe that with a less able lawyer things might have gone very differently, but your skills and knowledge brought about a just result.
As you know I am more than happy to supply any testimonials that you may seek in the future.
I am looking forward to meeting up with you when you have time, so that we can have a meal together to celebrate our success and enjoy some social time together. I’ll wait to hear from you when you have some time.

I thought I’d put my thanks in writing as a permanent statement and do feel free to use this letter in any way you wish.
— MC

Read Daniels CV here.

If you require advice in a tax of fraud investigation and wish to speak to Daniel please contact BSQ’s London offices or emai him at dgodden@berkeleylegal.co.uk