The number of arrests made in the UK for suspected tax evasion has fallen to its lowest level in five years, a new study has revealed.

The report, published by law firm RPC, suggests that the decline in enforcement activity could be attributed to the “high number of wrongful arrest claims brought by taxpayers”.

According to the report, just 782 arrests were made in the 2018/19 tax year – a fall of 11 per cent compared to 2017/18.

With experts suggesting that the tax authority is too eager to enforce unsubstantiated tax evasion activity, research author Adam Craggs says HM Revenue & Customs (HMRC) is becoming increasingly cautious over the misuse of its powers.

“There has been some criticism of HMRC for being too ‘trigger happy’ in the past – fewer arrests could be a sign that HMRC is now exercising its powers of arrest more responsibly and in accordance with the law,” he said.

“If HMRC has taken that criticism on board, and is now being more thorough before deciding to make an arrest then that is to be welcomed.”

Advising taxpayers, Mr Craggs adds that HMRC cannot arrest a person “simply because they have the power to do so”.

But with 1,500 HMRC officers now empowered to make an arrest, cases of wrongful arrest are only more likely to increase.

“Being arrested can have a seriously detrimental effect on a person’s life. They are likely to face difficulty obtaining a visa to travel to certain countries and it may well have employment implications, for example, if they work in financial services. HMRC must therefore ensure it is exercising proper diligence and acting in accordance with the law when arresting someone,” Mr Craggs concluded.

For help and advice with an HMRC tax investigation, please get in touch with our expert team.

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