What is the penalty for tax evasion in the UK?

If you are residing in the UK, you need to pay all your taxes wherever applicable as per the HMRC guidelines that look after taxation. However, if any kind of tax evasion is noticed then you will have to pay different penalties.

Tax evasion involves deliberate hiding and misrepresenting information to reduce taxes or avoid paying any taxes. So, while filing the taxes it is important that you have proper knowledge regarding the tax laws in the UK.

If HMRC detects any kind of irregularities or evasion of taxes, then you need to bear different tax evasion penalties. So, get knowledge and understanding about the penalties that are applied for evasion of the taxes.

What are the tax evasion penalties in the UK?

In the UK, you must comply with all the tax-related aspects, else there can be different types of penalties applicable.

Here are some penalties applicable for tax evasion:

1. Pay financial penalty amount

If someone is found guilty of tax evasion, they may be required to pay a financial penalty. The penalty amount is often based on the amount of tax evaded and can be substantial. In some cases, it can be a percentage of the tax evaded.

2. Criminal Prosecution

Tax evasion is a criminal offense in the UK. If individuals or businesses are caught evading taxes, they can be prosecuted in a criminal court. Upon conviction, they may face imprisonment for up to 7 years or an unlimited fine, or both. In serious cases or for repeat offenders, the sentences can be even more severe.

3. Making public notice

HM Revenue and Customs (HMRC) can publish details of deliberate tax defaulters, including their name, address, nature of the offense, and the penalties they have been issued. This is done as a deterrent and to enhance transparency.

4. Confiscation of the Assets

HMRC has the authority to seize assets to recover any unpaid tax or penalties. The assets will be confiscated with respect to the amount of tax evaded.

5. Professional Sanctions

Professionals, such as accountants or tax advisors, who are found to have aided or facilitated tax evasion may face professional sanctions. It can include removing them from their professional bodies.

What can happen if there is misinterpretation or mistake while tax filing?

If there is a genuine mistake while tax filing, then HMRC will consider it as an honest mistake. Most likely, there might be no penalties at all. Here, there is only a need to pay all the underpaid taxes. It must be noticed that cheating on the public revenue is also considered as an offense.

These are some of the important aspects about the tax evasion penalties in the UK. You either need to have a proper knowledge on the taxation in the UK or get this done by an expert tax consultant.

Are you the one who does not have a proper idea about dealing with the taxes in the UK then it is better you outsource this task.

Meru Accounting provides outsourced tax consultant services in the UK. They can help avoid tax evasion penalties with proper compliance. Meru Accounting is a proficient accounting services providing company around the world.