Deliberate understatement and concealment is an attempt at tricking HMRC, and as a result the consequences are extremely severe. If an individual or business is lucky enough to avoid criminal prosecution that could even lead to a custodial sentence, the fine levied by the government could be up to 200% of the missing tax due.
Deliberate Understatement becomes Deliberate Understatement and Concealment when a discrepancy is discovered on a tax return, and effort is then made to hide the evidence – by returning to a computer and creating a series of falsified invoices to account for the missing funds, for example, or asking somebody unaffiliated with your expense accounts to draw up backdated receipts.
Creating false contracts of employment also fall under this remit, as does amending existing paperwork to accommodate the discrepancy, or moving funds to another, undeclared bank account overseas. Of course, all of these actions also constitute fraud and leave you open to legal proceedings being opened against you.
Even if these penalties are not sufficient to deter Deliberate Understatement and Concealment of tax payments, an individual and business that has been decreed to have committed tax evasion will be ‘named and shamed’ on HMRC’s website, which will obviously have a hugely negative impact on any reputation. Thankfully, this can be avoided by confessing your misdemeanours to HMRC upon discovery and promptly paying any fines that may be levied against you.
There is nothing to gain by taking a chance on making declarations of tax returns. Seek professional advice surrounding your tax status if you have any concerns at all, and sleep better at night safe in the knowledge that you are protected from any unexpected financial penalties.