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Fraud, False Accounting, Fraudulent evasion of VAT, False statement for VAT purposes, Conduct amounting to an offence

Date Updated: January 2012

Title: Revenue Offences

Offences

  • Fraud,
  • False Accounting,
  • Fraudulent evasion of VAT,
  • False statement for VAT purposes,
  • Conduct amounting to an offence

Legislation

  • Fraud (Fraud Act 2006, s.1),
  • False Accounting (Theft Act 1968, s.17),
  • Fraudulent evasion of VAT (Value Added Tax Act 1994, s.72(1)),
  • False statement for VAT purposes (Value Added Tax Act 1994, s.72(3)),
  • Conduct amounting to an offence (Value Added Tax Act 1994, s.72(8))

Commencement Dates: 

  • Fraud Act 2006: 15 January 2007, Theft Act 1968: 1 January 1969,
  • Value Added Tax Act 1994: 1 September 1994    

Mode of Trial: Either Way

Statutory Limitations & Maximum Penalty:  

  • Fraud (prosecuted under Fraud Act 2006), 10 years imprisonment.
  • For all other offences, 7 years custody

Sentencing Range: 

  • Fine to 7 years imprisonment (Value Added Tax Act 1994),
  • up to 7 years imprisonment (Theft Act 1968),
  • fine to 10 years imprisonment (Fraud Act 2006)

Seriousness Indicators and Aggravating Factors:

  • Planning of an offence
  • Offenders acting in groups or gangs
  • Number involved in the offence and the role of the offender
  • 'Professional offending'
  • High level of profit from the offence
  • An attempt to conceal or dispose of evidence
  • Offending carried out over a significant period of time
  • The use of another person's identity

Mitigating Factors:

  • Peripheral involvement
  • Misleading or incomplete advice
  • Mental illness or disability of the defendant
  • Youth or age, where it affects the responsibility of the individual defendant
  • Behaviour not fraudulent from the outset
  • Legitimate entitlement to part or all of the amount claimed
  • Voluntary cessation of offending
  • Complete and unprompted disclosure of the extent of the fraud
  • Voluntary restitution
  • Financial Pressure

Relevant Sentencing Guidelines (If Any)

The Sentencing Guidelines Council Sentencing for Fraud (statutory offences)

Guidelines to Revenue Fraud (including VAT Offences)

Note: Where the actual amount is greater or smaller than the figure on which the starting point is based, that is likely to be one of the factors that will move the sentence within the range (see paragraph 6 on page 28).

Fraudulent from the outset, professionally planned and either fraud carried out over a significant period of time or multiple frauds 

  • £500,000 or more (Starting point based on: £750,000) - Starting point: 5 years custody. Range: 4 - 7 years custody 
  • £100,000 or more and less than £500,000 (Starting point based on: £300,000) - Starting Point: 4 years custody. Range: 3 - 5 years custody 
  • £20,000 or more and less than £100,000 (Starting point based on: £60,000) - Starting point: 2 years custody. Range: 18 months - 3 years custody 

Fraudulent from the outset and either fraud carried out over a significant period of time or multiple frauds 

  • £500,000 or more (Starting point based on: £750,000) - Starting point: 4 years custody. Range: 3 - 7 years custody 
  • £100,000 or more and less than £500,000 (Starting point based on: £300,000) - Starting point: 3 years custody. Range: 2 - 4 years custody 
  • £20,000 or more and less than £100,000 (Starting point based on: £60,000) - Starting point: 15 months custody. Range: 18 weeks - 30 months custody 
  • £5,000 or more and less than £20,000 (Starting point based on: £12,500) - Starting point: 12 weeks custody. Range: Community order (HIGH) - 12 months custody 
  • Less than £5,000 (Starting point based on: £2,500) - Starting point: Community order (HIGH). Range: Community order (LOW) - 6 weeks custody

Not fraudulent from the outset and either fraud carried out over a significant period of time or multiple frauds 

  • £500,000 or more (Starting point based on: £750,000) - Starting point: 3 years custody. Range: 2 - 6 years custody 
  • £100,000 or more and less than £500,000 (Starting point based on: £300,000) - Starting point: 2 years custody. Range: 12 months - 3 years custody 
  • £20,000 or more and less than £100,000 (Starting point based on: £60,000) - Starting point: 36 weeks custody. Range: 12 weeks - 18 months custody 
  • £5,000 or more and less than £20,000 (Starting point based on: £12,500) - Starting point: 6 weeks custody. Range: Community order (MEDIUM) - 26 weeks custody 
  • Less than £5,000 (Starting point based on: £2,500) - Starting point: Community order (MEDIUM). Range: Fine - Community order (HIGH)

Single fraudulent transaction, fraudulent from the outset   

  • £20,000 or more and less than £100,000 (Starting point based on: £60,000) - Starting point: 26 weeks custody. Range: 6 weeks - 12 months custody 
  • £5,000 or more and less than £20,000 (Starting point based on: £12,500) - Starting point: Community order (HIGH). Range: Fine - 18 weeks custody 
  • Less than £5,000 (Starting point based on: £2,500) - Starting point: Community order (LOW). Range: Fine - Community order (MEDIUM)

Single fraudulent transaction, not fraudulent from the outset   

  • £20,000 or more and less than £100,000 (Starting point based on: £60,000) - Starting point: 12 weeks custody. Range: Community order (MEDIUM) - 36 weeks custody 
  • £5,000 or more and less than £20,000 (Starting point based on: £12,500) - Starting point: Community order (MEDIUM). Range: Fine - 6 weeks custody 
  • Less than £5,000 (Starting point based on: £2,500) - Starting point: Fine. Range: Fine - Community order (LOW)

The presence of one or more aggravating factors may indicate a more severe sentence within the suggested range while the presence of one or more mitigating factors may indicate a less severe sentence within the suggested range.

For the purposes of this guideline the Council considered it unlikely that more than £20,000 could be obtained in a single fraudulent transaction against HMRC in circumstances where the offender's intention was not fraudulent from the outset or where the claim was exaggerated.

In addition, it is unlikely that more than £100,000 could be obtained in a fraud against HMRC in circumstances where the offender's intention was not fraudulent from the outset.

The presence of aggravating or mitigating factors of exceptional significance may indicate that the case should move to a higher or lower level of seriousness.

Sentencing Case Law

There are a number of sentencing case authorities set down by the Court of Appeal but the Court has itself indicated in R v Tongue (Ross) [2007] EWCA Crim 561 that "once guidelines have been issued it should be the exception rather than the rule to cite previous cases".

Ancillary Orders

  • Confiscation Orders
  • Compensations Orders
  • Financial Reporting Orders
  • Disqualification Orders (from acting as a Company Director)

Consider Also

  • Deportation

Links

  • Offence: Archbold 2012 Edition 21 - 226 et seq (False Accounting), 21 - 356 et seq (Fraud Act offences) and 25 - 530 et seq (VAT offences)
  • Sentencing: Current Sentencing Practice B9-2.3D - VAT frauds

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