SUCCESSFUL family companies are being warned that tax evasion is a bad idea, particularly during the current Inland Revenue clampdown.
Manchester-based Richard Jamieson, head of KPMG's tax investigations team in the North, cites a landmark court ruling involving a Manchester businessman who was jailed for two years after admitting evading tax.
Mr Jamieson said: "In this type of case, a so-called 'confiscation order' for the recovery of the evaded tax and interest has previously been made by the court.
"However, the taxpayer in this case was subjected to an order to confiscate the whole of the profits under-declared -- over £1 million of company funds which he had diverted to a hidden bank account -- and not simply the tax and interest.
"If he fails to pay off this amount he will face a further substantial prison term."
Mr Jamieson said the Treasury had asked the Revenue to carry out double the number of full-scale investigations over the coming financial year -- with a requirement to detect non-compliance in more than three-quarters of all cases investigated.
He went on: "I believe that successful family companies are particularly at risk given the onset of the inquiry regime under self-assessment for companies.
"It is no longer a question of 'if' such a business will be investigated but rather 'when'.
"Any companies with potential tax issues would be well-advised to seek professional advice in advance of any queries being raised."
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