Study argues UK must treat tax evasion as corruption to secure convictions

Tax evasion should be legally classified as a form of corruption if the UK is to effectively hold financial criminals accountable, according to a new academic study. Experts warn that without stronger enforcement and clearer rules on corporate liability, the UK will continue to struggle to prosecute tax offences, allowing sophisticated financial crimes to go unpunished.

Background and Context

Despite possessing sophisticated financial crime legislation, the UK fails to hold companies and senior executives meaningfully accountable for corporate tax crime and corruption. Research published in the Criminal Law Review by Professor Umut Turksen of the University of Exeter and Dr Alison Lui of Liverpool John Moores University argues that the UK lacks a single, coherent definition of tax crime.

Currently, offences are dispersed across common law and a patchwork of statutes, creating uncertainty for policymakers and prosecutors. This legal ambiguity allows individuals and organisations to exploit gaps through profit shifting schemes, opaque corporate structures, and offshore arrangements. The authors contend that tax crime and corruption are wrongly treated as separate domains—one focused on evasion, the other on bribery and abuse of power—when in practice, they are deeply interconnected.

Key Figures and Entities

The study highlights the role of HM Revenue and Customs (HMRC), noting the agency's longstanding preference for civil recovery over criminal prosecution. Professor Turksen states that this reflects a "revenue first mindset" where prosecution is viewed as inefficient and risky compared to simply recovering the funds owed.

According to the researchers, the scale of underenforcement is stark. In 2022–23, there were 76,000 suspected tax fraud reports, yet only 540 individuals were charged. The study points to a legal architecture that suffers from significant inconsistencies in scope and terminology, particularly regarding the "failure to prevent" model found in the Bribery Act 2010 versus the narrower provisions in the Criminal Finances Act 2017.

Legal and Financial Mechanisms

The investigation details how mechanisms like false invoicing, bribery of tax officials, and manipulation of financial records often serve dual purposes: to evade tax and to disguise corrupt payments. However, legal definitions of corruption, fraud, and tax offences remain inconsistent, complicating enforcement.

While the "failure to prevent" model—expanded recently through the Economic Crime and Corporate Transparency Act 2023—was intended to overcome the identification doctrine, the study finds it has become heavily intertwined with Deferred Prosecution Agreements (DPAs). Critics argue this creates a two-tier justice system where large firms negotiate their way out of criminal liability through cooperation and compliance reforms rather than facing conviction.

International Implications and Policy Response

The failure to harmonize tax crime with corruption has broader implications for the UK's standing in global financial integrity. By maintaining distinct legal categories for interconnected crimes, the system creates significant interpretive latitude for defence counsel and hampers empirical assessment of financial crime trends.

Dr Lui argues that similar misconduct, such as false invoicing, may fall under entirely different statutes with different thresholds and defences. Without the coherence necessary for streamlined enforcement, the UK risks remaining a safe haven for complex corporate financial malfeasance, despite its robust legislative framework.

Sources

This report draws on the study "The triadic dilemma in the criminalisation and prosecution of corporate tax fraud and corruption in the United Kingdom" by Lui A. and Turksen U., published in (2026) Criminal Law Review, Issue 2. It also references public records from UK legislation and institutional policies at HMRC.