Recommendation 24

HMRC reserves criminal investigations for where it needs to send a strong deterrent message or where only a criminal sanction is appropriate.45 HMRC told us that deterrence works primarily through media and social media so focusing on the most severe cases, which will attract the highest penalties, is likely to be the best deterrent. It said that it has looked at whether it can quantify the deterrent effect, but it cannot put a monetary value on the impact of its criminal investigations. It did though stress the importance of the deterrent effect of taking cases to court. We raised concerns that, in some instances, HMRC is not using its existing powers to tackle non-compliance. HMRC said that it uses the powers it thinks are most effective to tackle the problems it faces.46 HMRC subsequently provided information on the total number and value of penalties issued by HMRC in relation to offshore tax evasion or non-compliance. While it acknowledged the vital importance of its use of powers for their deterrent effect, we noted that HMRC has issued no penalties to enablers of tax evasion, despite the role unscrupulous advisers often play in helping the wealthy evade tax.47 Boosting public trust and confidence through transparency