I have heard that the tax man is going to prosecute more people in the Criminal Courts, should I be worried if I make a mistake?

Earlier in the year HM Revenue & Customs announced that would be looking to increase the number of criminal prosecutions they bring annually to about 1,000 – a fivefold increase.

This is however a tiny proportion of the number of enquiries into Tax Returns they undertake. Historically HMRC have found it far more cost effective to use their general powers and civil penalties to collect extra tax which is due. Their intention is usually to collect any extra tax due and encourage taxpayers to comply with their obligations in the future and the significant penalties which can be charged without going to the Criminal Courts are enough to achieve this

There is clear guidance on the types of cases where criminal action might be considered appropriate which includes situations where there has been previous offences, the taxpayer is a professional advisor, there are threats to HMRC officers or there are links to wider criminal activity

So, in summary, there is almost no chance that HMRC will take criminal proceedings if you have made a mistake, but you may still get a financial penalty if HMRC take the view that you have been careless. This is however a sign of the increased effort which HMRC are putting into targeting tax evasion and what they see as tax avoidance.