Simon,
My accountant tells me that there are plenty of cases where HMRC, on finding what they believe to be tax avoidance, make the suspect an "offer": pay the unpaid tax plus a penalty of 2 to 4 times the unpaid tax and we will not prosecute.
Prosecution of tax avoidance cases is difficult, it is one area where our system of jury trials works against justice as to present a complex tax avoidance case to a jury of lay people in a manner that is going to get a conviction is very difficult. A number of very costly trials have failed because the Jury was unable to grasp the incredibly complex nature of the case.....
HMRC inspectors now have to show that the cost of preparing the court case will be less than the amount of unpaid tax likely to be recovered. Which may be why they make people "an offer they can't refuse"!
