Fraudulent evasion of income tax
Fraudulent evasion of income tax

The following Corporate Crime practice note provides comprehensive and up to date legal information covering:

  • Fraudulent evasion of income tax
  • Offence of fraudulent evasion of income tax
  • Elements of the offence of fraudulent evasion of income tax
  • Being 'knowingly concerned'
  • Fraudulent evasion
  • Sentencing for fraudulent evasion of income tax

Fraudulent evasion of income tax

Offence of fraudulent evasion of income tax

Section 106A of the Taxes Management Act 1970 (TMA 1970) provides that a person commits an offence if they are knowingly concerned in the fraudulent evasion of income tax by themselves or any other person.

The offence, which is triable either way, does not concern the evasion of taxes other than income tax and capital gains tax and does not apply to things done or omitted before 1 January 2001.

Elements of the offence of fraudulent evasion of income tax

Being 'knowingly concerned'

The test for being 'knowingly concerned' in an income tax fraud was one requiring both:

  1. knowledge (rather than mere suspicion) of an offence, and

  2. actual involvement in it (simply paying for services in cash was unlikely to satisfy this test)

In other words, the person must have knowledge and involvement in the fraud. Someone can be said to know something if they are sure that is so, and this is different in law to recklessness which means taking unjustified risks (R v Godir). An example of this is where a person helps another evade income tax by helping to produce false business records. The offence did not apply to a person merely because they were invited to pay

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