Fraudulent evasion of income tax

Over the years I have come across a few people who have been worrying about whether their employer was paying PAYE/NIC to HM Revenue and Customs, and the impact on them.

Recently a case went to Reading Crown Court. A Reading based businessman who stole over £1m from his employees wages has been jailed for four years.

For more than five years, Kenneth Crookes, deducted income tax and national insurance contributions from his staff’s wages, but didn’t pay it over to HMRC.

Each month Mr Crookes ran his payroll correctly, and submitted the information to HMRC, but then failed to pay it. He ignored all communication with HMRC, and was eventually arrested for fraudulent evasion of income tax in February 2014.

HMRC assistant director for fraud investigation John Cooper said “Crookes was shamelessly deceiving his own staff who thought they were paying their taxes, but instead he was using the money that should have been paying for public services to fund his own lifestyle and prop up his business.”

The scenarios I have come across are where the employee thinks that their employer isn’t submitting the correct payroll information to HMRC. If you don’t submit a self assessment tax return, where the inconsistency would be spotted, then it may go undetected until you receive a letter from The National Insurance Office stating that you haven’t paid enough NI contributions.

If you would like to discuss this issue, or have any other accountancy or tax queries, please contact Alison at Mark Stanley Accountants on 01207 582528 or [email protected]