As part of the government’s Legislation Day (L-Day) on 18 July 2023, HMRC have issued a policy paper setting out new proposals to double the maximum prison term for individuals convicted of serious tax fraud. Draft legislation is included in Finance Bill 2023-24.

Currently, the maximum criminal sentence for what HMRC describe as ‘egregious’ examples of tax fraud is seven years in prison. It is proposed that this is increased to fourteen years from the date of Royal Assent of Finance Bill 2023-24. This sanction is over and above any civil penalties that may be charged by HMRC where tax fraud has been committed.

The types of offences that this will apply to are varied and include but are not limited to:

  • Fraudulent evasion of VAT, income tax, Stamp Duty Land Tax (SDLT), soft drinks industry levy and plastic packaging tax. Interestingly the list here does not include Capital Gains Tax.
  • Fraudulent evasion of machine games duty, landfill tax, aggregates levy, climate change levy and agricultural levy.
  • Fraudulent evasion of duty payable on goods.
  • Counterfeiting, which currently has a maximum sentence of ten years.

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Policy paper: Doubling the maximum prison term for the most egregious examples of tax fraud

Draft legislation

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