Tax Evasion (Cheating the Public Revenue / Fraudulent Evasion of VAT)

Fraudulent evasion of VAT is an offence under s.72(1) Value Added Tax Act 1994. A person commits the offence if he is knowingly concerned in, or in the taking of steps with a view to, the fraudulent evasion of VAT by him or any other person (s.72(1)); evasion of VAT includes obtaining the payment of a VAT credit, a refund under s.35 or s.36 or a repayment under s.39 (s.72(2)). Maximum sentence: on conviction on indictment, a penalty of any amount or imprisonment for a term not exceeding 14 years, or both (the 14 year figure was substituted from 22 February 2024 by Finance Act 2024, s.32(1)); on summary conviction, a penalty of £20,000 or of three times the amount of the VAT, whichever is the greater, or imprisonment for a term not exceeding 6 months, or both (s.72(1)). Section 72(3) and (8) create related offences of using false documents or making false statements with intent to deceive, and of conduct over a period that must have involved such offences, each carrying the same maxima. The common law offence of cheating was abolished by the Theft Act 1968 except as regards offences relating to the public revenue (Theft Act 1968, s.32(1)(a)), so cheating the public revenue remains a common law offence; this page sets out the statutory VAT offence.

In practice

This is an either-way offence: it may be tried at the magistrates' court or the Crown Court. The charging decision rests with the CPS (not police). The suspect must be cautioned in accordance with Code C PACE 1984 before any questions about the offence are put to them. Interviews must be audio-recorded (Code E) or, for indictable offences, may be visually recorded (Code F).