The simple answer is that once caught, they go to jail.
I say this because HMRC has always taken a dim view of professionals fiddling tax. They take an even dimmer view of professionals who conspire to assist their clients in fiddling.
I remember an accountant near me who went to jail for his offences, despite that fact that he was 70 years old when sent down.
A while ago a crooked accountant in England was jailed for 7 years for attempting to defraud the Revenue. It is estimated by the Revenue that his efforts cost them more than £1 million.
The case is interesting for two reasons – firstly to show what HMRC does to bent accountants, and secondly because of the things that happened during the court case.
The fraud involved abuse of the special tax vouchers used in the construction industry. The accountant submitted fraudulent repayment claims and tax deduction forms. Also he advised others to do the same.
The deception included the creation of fictitious building workers, and the money gained was split between the accountant and the others involved. They were building contractors and sub-contractors.
Eight of the others involved in the case were jailed for periods of between one and three years.
Curious goings-on also occurred during the case. For example several prosecution witnesses told the court of death threats which they had received. These people were told not to give evidence at the trial
These aspects of the case show that HMRC’s prosecutors are now feared because people know they can go to jail for their tax fiddling.
Huston’s Hint
Steer clear of bent accountants – once HMRC catches them your accountant may be unable to return your calls for a year or two. And of course all his clients will become of interest to the tax-man!