NEWS
10/09/2018 10:38 BST | Updated 11/09/2018 19:32 BST

HMRC Admits Letting ‘Powerful’ People Get Away With Financial Crimes

They've said criminal justice is only used 'where it is necessary'.

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HM Revenue & Customs has admitted to letting “powerful” members of society – including celebrities – escape prosecution for financial crimes.

The disclosure, reported on by The Times, came at a conference in Cambridge last week when Richard Las, a deputy director for HMRC, said criminal proceedings are not the “default option” for cases including tax evasion, fraud or money laundering.

Explaining that criminal justice is only used “where it is necessary and it will have the greatest effect”, he said: “When deciding whether to deploy our resources, we try to understand what motivates different types of offenders.”

“For example some tax offenders are very wealthy, prominent members of the community.

“We know that these types of people do not want the reputational damage of custodial sentences, and we can use that to our advantage.”

Penalties for financial crimes vary greatly and for tax evasion, independent advisory TaxAid says that an individual is unlikely to face prosecution unless the amount of unpaid tax totals over £50,000.

If HMRC do successfully prosecute, a settlement to pay the money, and any penalties, is agreed. It’s also possible for a jail sentence to be handed down.

In recent years, celebrities including David Beckham and Jimmy Carr have been caught using schemes to avoid tax.

MPs have previously called for greater punishments for people who do so and in 2017, following the leak of the so-called “Paradise Papers”, shadow chief secretary to the treasury Peter Dowd accused the government of being “out of touch” on tax avoidance.

The papers revealed the names of more than 1,200 people and companies who had invested in offshore tax schemes and sparked a Europe-wide call for action against anyone involved.

In an open letter published two months after the documents were shared online,  more than 30 members of the European parliament signed an open letter calling for the UK to take action against offshore schemes.

“We regret that some governments, not least the British government, have failed to learn the lessons from the previous ‘LuxLeaks’ and ‘Panama Papers’ scandal,” they said.

“The Paradise Papers must act as a wake-up call to deal with industrial-scale tax dodging, once and for all.”

This article previously mentioned Bear Grylls as among celebrities caught in tax avoidance schemes. Previous articles in The Times and the Daily Mail have reported that his investments have come under investigation. A representative for Grylls told HuffPost UK he had not been involved in any such schemes.