Tax is one of the most challenging areas of UK law, and has application to both businesses and individuals. The rules on taxation are incredibly difficult to understand, and often result in regulatory investigations which can have significant consequences, ranging from financial penalty through to prosecution for those that fail to observe them. Tax law is rigorously enforced in the UK by Her Majesty’s Revenue & Customers (HMRC), which applies considerable resources in investigating and sanctioning breaches of tax law.

Bright Line Law is a leading provider of advice and representation to corporate and individual clients in dispute with HMRC. Our experience includes assisting clients to engage with HMRC on all aspects of taxation, from corporate tax through to inheritance and income tax. Our goal is to assist clients in dealing with HMRC effectively, addressing concerns and defending client interests where litigation becomes necessary. In the ever-changing field of tax law, it is imperative that specialist legal advice is taken when regulatory concerns are raised.

When will HMRC investigate tax affairs?

HMRC is responsible for the collection of taxes in the UK. It is also charged with policing tax law and ensuring that both corporate entities and individuals comply with this complex body of rules.

Tax evasion

The distinctions between illegal tax evasion and permissible tax avoidance have been steadily blurred. The difficulty is that while effective use of tax rules is allowed, there is a danger that tax avoidance schemes, following investigation by HMRC can be deemed tools for illegal tax evasion. If HMRC is investigating such a scheme, or raises civil litigation following an investigation, it is important to take expert legal advice on the options available and how to challenge allegations of having breached tax evasion laws.

Individual taxpayers and businesses are not alone in being vulnerable to HMRC investigation. Professionals engaged in providing tax advice are also subject to a range of complex and ever changing rules on what constitutes acceptable conduct in promoting the use of tax efficient schemes and frameworks. If advice given is claimed to breach financial promotion legislation, this should be discussed with an experienced tax lawyer and advice taken on how to respond. 

The penalties for being found guilty of illegal tax evasion are significant, both for individuals and businesses. They may find themselves being forced to pay significant sums of money in recouped taxation, together with additional sums in recognition of illegal activity. There may be scope to limit any likely penalty by way of a voluntary disclosure, but this should be considered after having taken advice on the consequences that will follow. Furthermore, the career of professional tax advisors can be put at risk if found to have breached accepted standards. This too should be the subject of discussion with tax counsel, and a plan formulated on how best to respond to such allegations.

Tax fraud

HMRC takes an aggressive stance against suspected instances of tax fraud. It is not uncommon for HMRC to raise criminal proceedings for a deliberate attempt to cloud tax affairs, and for any attempt to hide from or deceive an investigation. HMRC has historically been very active in investigating and prosecuting VAT fraud, which has been maintained together with a renewed focus on investigating suspected fraud across all areas of UK tax law.

Evidence of an individual’s commission of tax fraud can have serious consequences. HMRC has the power to recoup the relevant tax by way of confiscation orders. Furthermore, individuals are likely to face a lengthy period of imprisonment if found guilty of having committed tax fraud. Businesses can also suffer heavily if found guilty of fraud, which may prove fatal to their long-term sustainability.

Tax law is immensely complex. It is paramount that individuals facing investigation or litigation for having failed to observe their obligations under UK tax rules consult with experienced counsel.

Bright Line Law – Expert Tax Advice

Taxation is complex and constantly changing. Those facing investigations by HMRC, or the prospect of becoming embroiled in criminal or civil litigation, must instruct expert legal counsel with a history of dealing with HMRC and a working knowledge of this demanding area of UK law. Sanctions for a breach of tax rules are weighty and could have long term implications for a business’s continued financial stability and individuals’ financial comfort and personal liberty. If you or your business have been approached by HMRC regarding your tax affairs, or need guidance on how to defend allegations for having committed a crime, you should instruct a law firm that has insight into how such specialist investigations and litigation are conducted.

Bright Line Law has a well-regarded tax practice, with experience of advising both business and individual clients on disputes with HMRC. Jonathan Fisher QC, leads Bright Line Law’s barrister-led practice, and is regularly instructed to act for clients accused of breaching anti-avoidance rules. He has previously been involved in advising on the use of, and regulatory investigation of, film industry, and offshore tax schemes. We have also been instructed to represent clients in criminal and civil litigation initiated by HMRC.

Bright Line Law regularly works with other leading barristers and experts in the field of tax law - including forensic and chartered accountants, as well as professional tax advisors - to assist clients and deliver pragmatic solutions to legal problems. At Bright Line Law, our goal is to resolve regulatory issues quickly and provide a rigorous defence to accusations of violations of tax law. Contact us today to learn more about our work, and how our skills and expertise can be used to help you and/ or your business.

Jonathan Fisher QC
Lead Counsel

Telephone + 020 3872 2852

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