UK’s Penalties for Tax Evasion

The proper filing of taxes is a requirement in most countries and to skip this requirement could mean great penalties. In the United Kingdom, Her Majesty’s Revenue and Customs (HMRC) ensures that all UK citizens fulfill their stamp duties and pay their taxes accordingly, or else, they can face the following consequences:

1.     Custodial Sentence

In a serious case of tax evasion, a citizen could face potential custodial sentence for tax evasion. Usually, these involve the citizen not paying their taxes for more than half a decade and gaining a large net profit. Sometimes, if the business is an underground business, for example, the sale of smuggled oil or perishable goods without taxation, the larger the profit, the larger the citizen’s potential for a custodial sentence.

2.     Paying it All Back

Along with the tax evader’s sentence, the law also requires you to pay back all the tax you owe along with the interest the tax has accrued over time. Along with the interest, you will also pay back the maximum penalty. For serious cases, evaders are actually charged with a 100% equivalent of the tax owed by the evader.

3.     Process

If you’re incarcerated for a high amount of tax evasion, you may need to serve your sentence and pay off your tax debt for the rest of your life. However, for tax evasion cases lower than £50,000, tax evaders may only face an offense and may need to pay only their actual tax, interest rate and penalty fee with an arrangement both the evader and the HMRC agrees upon.