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. Elements of the offence of fraudulent evasion of income tax Being 'knowingly concerned' The test for being 'knowingly concerned' in an income tax fraud is one requiring both: • knowledge (rather than mere suspicion) of an offence, and • actual involvement in it (simply paying for services in cash is 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 it is so, and this is different in law to recklessness which means taking unjustified risks (R v Godir). For example, the offence

The Crown Prosecution Service (CPS) has announced that fraudulent foreign exchange trader, Joseph Lewis, pleaded guilty to a £20.5m international investment scam. Lewis pleaded guilty to 19 fraud offences at Southwark Crown Court, which most notably included his involvement in a Ponzi scheme which he had been running since 2009. Lewis had taken millions of pounds from people who believed they were investing in foreign exchange trading and send them fraudulent monthly reports which made it seem as if their investments were doing exceptionally well. Instead, investors' money had been paid into Lewis' personal accounts and was used to pay for lavish events around the world, as well as paying other clients. When Lewis used his final client's investment of £279,000, he was forced to admit to investors that the funds had gone. Lewis emailed his clients and told them he had not been trading with their investments since 2009, after which he went to a police station to hand himself in.

Law360, London: Fraudulent claims in the UK general insurance sector rose again in 2024, with those linked to motor cover driving much of the increase, the Association of British Insurers (ABI) warned on 17 November 2025.

A knowingly false assertion intended to mislead another and make them agree to a contract because of that misrepresentation.

Dispute Resolution analysis: His Honour Judge David Cooke’s judgment provides a summary of the test for finding fraudulent misrepresentation before going on to consider the basis on which damages may be awarded, in circumstances where what was sought was the cost of rectification works for misrepresentations and breach of warranty relating to unlawful drainage of a property and business which the defendants had fraudulently failed to disclose to the claimants on purchase.

Dispute Resolution analysis: Parties alleging fraudulent misrepresentation have to prove that they were materially influenced into entering into a contract by representations made. An evidential presumption arises that a statement which was likely to induce the representee to enter into a contract, did so. It is not a reversal of the burden of proof. It is however a ‘very difficult’ presumption to rebut. Transferred loss is an exception to the general rule that a claimant may only recover their own loss, but it requires a known third party benefit. Written by James McKean, barrister at New Square Chambers.

The carrying on of the business of a company with intent to defraud creditors of the company or creditors of any other person, or for any fraudulent effect, as set out under the Insolvency Act 1986, s 213.

A fraudulent trading claim arises under two separate statutory routes: • it is a criminal offence under section 993 of the Companies Act 2006 (CA 2006) • a civil remedy arises under sections 213 and 246ZA of the Insolvency Act 1986 (IA 1986) This Practice Note deals with the latter. What is fraudulent trading? Fraudulent trading is a claim which arises under IA 1986, s 213 (liquidation) or IA 1986, s 246ZA (administration) and seeks to recover property to the company’s assets where: • the company has been wound up or entered administration, and • any business of the company was carried on with intent to defraud creditors of the company or creditors of any other person, or for any fraudulent purpose In the circumstances, negligence or incompetence will not be sufficient. Who can commence a fraudulent trading claim? Historically, fraudulent trading claims could only be brought by a liquidator. However, since 1 October 2015 both liquidators and administrators can bring them. Aside from contextual

This Flowchart sets out the conditions that must be satisfied to establish a fraudulent trading claim. It should be read alongside Practice Note: Fraudulent trading claims under sections 213 and 246ZA of the Insolvency Act

This Practice Note explains the elements of the offence of fraudulent trading under section 993 of the Companies Act 2006, and illustrates through case law how these elements are interpreted by the court. It includes the penalties for fraudulent trading and the sentences which may be given, taking into account any relevant factors and aggravating features. It also deals with ancillary orders that can be made following conviction. Fraudulent trading Fraudulent trading by a company is an offence prohibited by section 993 of the Companies Act 2006 (CA 2006). Section 9 of the Fraud Act 2006 (FrA 2006), makes fraudulent trading by sole traders, partnerships and trusts and other non-corporate entities a criminal offence. See Practice Note: Fraudulent trading under the Fraud Act 2006. The offence under CA 2006, s 993 is triable either in the magistrates' court or the Crown Court. Elements of CA 2006 offence of fraudulent trading There are two limbs to this offence: • carrying on the business of a company with intent to defraud creditors of the

Fraudulent trading under the Fraud Act 2006 A defendant, who is a sole trader, in a partnership or a trust, commits the offence of fraudulent trading under section 9 of the Fraud Act 2006 if they knowingly participate in the carrying on of a business by a person who falls outside the scope of section 993 of the Companies Act 2006 (CA 2006), with intent to defraud creditors or for any other fraudulent purposes. Where the offence is committed by a company, it would be charged under CA 2006, s 993. FrA 2006, s 9 extends the type of fraudulent business to circumstances in which the business is not carried on by a company or a corporate body. This parallels the offence that applies in the case of fraudulent businesses carried on by companies and other corporate bodies but extends criminal liability to non-corporate traders, including sole traders, partnerships and trusts and other non-corporate traders. The offence of fraudulent trading has evolved through case law and it is established that the offence has these

This Practice Note compares the key characteristics of pursuing a fraud claim either by way of a civil claim or a private criminal prosecution, including identifying the contrasts between the two procedures. It therefore considers: jurisdiction, limitation, publicity and media interest, control of the litigation and decision making, the length of the proceedings, the selection of charges (criminal) or heads of claim (civil), the standard of proof, investigation and evidence gathering, pre-action considerations, the preservation of assets using urgent and interim orders, the privilege against self-incrimination (right to silence), disclosure during the proceedings, defences and counterclaims, costs, non-financial and financial outcomes (prison sentences, damages, confiscation and compensation) and enforcement. It serves as a summary reference guide for practitioners who are considering the options for their client of either pursuing a civil claim for fraud or a private prosecution (or potentially both in parallel). For general guidance on civil fraud claims see: Civil fraud—overview and in particular: • Practice Note: Civil fraud—heads of claim • Practice Note: Starting a civil fraud claim—a practical guide