CPS to crack down on tax evasion

A populist move, which may be less popular than expected.

The head of the Crown Prosecution Service, Keir Starmer, has told the Financial Times that he is planning to increase fivefold the number of tax evasion cases the organisation takes on. Caroline Bingham writes:

Tax consultants who push dishonest avoidance schemes – and the professionals who invest in them – are central targets in the strategy. 

“There have been some cases involving lawyers, some involving tax consultants, and plumbers,” Mr Starmer said in an interview. “Within the ramped-up volume, it’s intended that we will select cases to send a clear message as to the breadth of our coverage.”

The FT reports that there were just 200 convictions secured in 2010, even with a conviction rate of 86 per cent. We can infer from those figures that the CPS only takes on cases where it has a very strong expectation of success, which is a different operating procedure from most other crimes which it prosecutes.

The tough stance of the CPS is matched by an equivalent stance from HMRC as both organisations try to crack down on the estimated £14bn a year lost to evasion.

Part of the plan is to explicitly pick cases which are harder to prosecute to make it clear that any type of tax evasion — not just the easy-to-prove cases — may be subject to prosecution. In addition, the CPS will apparently be prosecuting "everyday" tax evasion — that is, rather than just going after the most egregious offenders, it will prosecute people who match the typical profile of a tax evader. Starmer told the FT:

There have been some cases involving lawyers, some involving tax consultants, and plumbers. Within the ramped-up volume, it’s intended that we will select cases to send a clear message as to the breadth of our coverage.

The news is undoubtedly a success of sorts for campaigning groups like UKUncut, which has focused on tax evasion and avoidance and a source of missing income for the nation since 2010. There is now crystal-clear acceptance on the part of some of the most conservative institutions in government that it is unacceptable to be cutting public services while not putting as much effort as possible into securing revenue.

But the way the CPS intends to go about this new policy may be a double-edged sword. UKUncut has historically focused on the biggest individual cases, like Vodafone, which it alleges avoided £6bn in tax, or Topshop owner Philip Green, who the group claims avoided £285m.

The CPS plans to go after the exact opposite. Those hit will likely be self-employed people failing to declare all their income, as well as those more explicitly evading tax. It is harder to frame such a crackdown as the rich stealing from the poor given at least some of those evaders will themselves be earning little.

That's not to say that the CPS isn't pursuing a progressive strategy in implementing its new prosecution plan. But it may turn out being less populist than it, or the protest groups who have pushed for it, planned.

Keir Starmer. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

Photo: Getty Images
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Britain's shrinking democracy

10 million people - more than voted for Labour in May - will be excluded from the new electoral roll.

Despite all the warnings the government is determined to press ahead with its decision to close the existing electoral roll on December 1. This red letter day in British politics is no cause for celebration. As the Smith Institute’s latest report on the switch to the new system of voter registration shows, we are about to dramatically shrink our democracy.  As many as 10 million people are likely to vanish from the electoral register for ever – equal to 20 per cent of the total electorate and greater than Labour’s entire vote in the 2015 general election. 

Anyone who has not transferred over to the new individual electoral registration system by next Tuesday will be “dropped off” the register. The independent Electoral Commission, mindful of how the loss of voters will play out in forthcoming elections, say they need at least another year to ensure the new accuracy and completeness of the registers.

Nearly half a million voters (mostly the young and those in private rented homes) will disappear from the London register. According to a recent HeraldScotland survey around 100,000 residents in Glasgow may also be left off the new system. The picture is likely to be much the same in other cities, especially in places where there’s greater mobility and concentrations of students.

These depleted registers across the UK will impact more on marginal Labour seats, especially  where turnout is already low. Conversely, they will benefit Tories in future local, Euro and general elections. As the Smith Institute report observers, Conservative voters tend to be older, home owners and less transient – and therefore more likely to appear on the electoral register.

The government continues to ignore the prospect of skewed election results owing to an incomplete electoral registers. The attitude of some Tory MPs hardly helping. For example, Eleanor Laing MP (the former shadow minister for justice) told the BBC that “if a young person cannot organize the filling in of a form that registers them to vote, they don’t deserve the right to vote”.  Leaving aside such glib remarks, what we do know is the new registers will tend to favour MPs whose support is found in more affluent rural and semi-rural areas which have stable populations.  

Even more worrying, the forthcoming changes to MPs constituencies (under the Boundary Review) will be based on the new electoral register. The new parliamentary constituencies will be based not on the voting population, but on an inaccurate and incomplete register. As Institute’s report argues, these changes are likely to unjustly benefit UKIP and the Conservative party.

That’s not to say that the voter registration system doesn’t need reforming.  It clearly does. Indeed, every evidence-based analysis of electoral registers over the last 20 years shows that both accuracy and completeness are declining – the two features of any electoral register that make it credible or not. But, the job must be done properly.  Casually leaving 10m voters off the electoral resister hardly suggests every effort has been made.

The legitimacy of our democratic system rests on ensuring that everyone can exercise their right to vote. This is a task which shouldn’t brook complacency or compromise.  We should be aiming for maximum voter registration, not settling for a system where one in five drop off the register.