The CPS is set to increase the number of tax evasion cases it prosecutes fivefold to 1,500 a year by 2014-15.
The CPS is set to increase the number of tax evasion cases it prosecutes five-fold to 1,500 a year by 2014-15. In 2010, the Crown Prosecution Service secured just 200 tax convictions.
The FT (£) reports:
[Director of Public Prosecutions] Mr Starmer will telegraph the CPS’s new approach in a speech on Tuesday. He is expected to dispel the idea of tax evasion as a victimless crime, stressing that tax cheats cost each household the equivalent of £533 a year.
The CPS’s tougher stance matches that of HM Revenue & Customs – which investigates cases before referring criminal files to the CPS – as both organisations try to rein in the £14bn a year that the economy loses from tax evasion. HMRC’s prosecution office was merged into the CPS in 2010.
With the Telegraph adding:
Multinational companies are also being investigated over £1bn of UK taxes that may have been avoided by transferring profits earned in Britain to their parent companies or to lower tax jurisdictions, it is disclosed today…
An accounting method, known as transfer pricing, can involve a parent company charging its regional divisions in the UK a royalty fee for its brand name and corporate marketing benefits, with the payments being transferred directly to the head office abroad.
In other firms, the brand name, trademarks or research and development services are registered not in the UK, but in another country with lower tax rates such Luxembourg or Ireland. This has the effect of magnifying profits in the lower tax jurisdiction and minimising them in the UK.
The £1bn under investigation represents a 47pc increase in transfer pricing investigations over the last 12 months.
Elsewhere, ethical investors are stepping up their focus on tax avoidance; growing anger at aggressive tax avoidance by big business has prompted them to consider shunning shares in companies that don’t pay their fair share of tax.
Reuters reports:
Many investors with a ‘socially responsible’ mandate say they have long taken account of companies’ tax practices when deciding where to invest, but few if any funds have made a point of screening out companies over tax issues, according to more than a dozen industry professionals contacted by Reuters.
That may be about to change.
FTSE Group, which compiles the share indexes that fund managers in the UK, United States and Asia use to build investment portfolios, said it was looking into excluding companies with what it called overly aggressive tax reduction policies from its ethical index group, FTSE4Good…
The FTSE4Good indexes are one of the benchmarks most commonly used by ethical funds to build their portfolios. European funds invested in socially responsible investments totaled 7 trillion euros ($9.30 trillion) at the end of 2011, according to European Sustainable Investment Forum, an ethical investment industry association.
Last month on Left Foot Forward, Sophie Tease of FairPensions wrote about the importance of ethical investment, pointing out the unethical behaviour of companies in regard to not just tax but “gambling, porn and nuclear… labour standards, human rights and environmental protection”, and how ethical investors should use their power to “reduce pollution, improve animal welfare standards and prevent banks funding cluster bomb and landmine production”. Read it here.
See also:
• Another example of tax evasion, this time from “the world’s favourite bank” – November 9th, 2012
• Global super-rich hoarding “up to £20tn” as HMRC get set to ‘name and shame’ tax dodgers – July 23rd, 2012
• $3.1 trillion lost to tax evasion globally; cost to Britain: £69.9 billion – November 25th, 2011
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2 Responses to “CPS set to quintuple tax evasion prosecutions”
LB
With the free movement of people, goods and services, the free movement of capital is one of the four fundamental freedoms of the EU.
==============
It’s a freedom. How can you be against a freedom and go against the EU?
You’re in favour of the EU. You want us to be in. Not that you’ve given us the vote.
So money moving where the taxation is low is a direct consequence.
Newsbot9
No, you don’t have a vote given you’re not a citizen. And?
And taxation is being slashed here. Money’s flowing out. So much for your theory.