Thursday, February 02, 2006



I read in Private Eye the other week that the 12½year jail term imposed on Ian Leaf for tax evasion is thought to be the second largest jail sentence ever imposed for a white collar crime. My train of thought moved on to how does society rate tax evasion as compared with other crimes. I have therefore done a quick survey from the newspapers over the last week or so to compare Ian’s 12½year jail sentence with sentences for other crimes.

Actually I am not sure whether Ian’s jail sentence is 12½years or 22½years. He is estimated to have made a profit of £22million from his crime and the courts have said that if he does not repay £98million he must serve an extra 10 years. Most of us would find it difficult to pay £98million our of £22million of assets, so I suspect the real jail sentence is 22½years. Ian has asserted that he does not have £98million. It is not clear whether this is the amount that the Revenue are claiming i.e. tax plus interest plus penalties of up to 100% of the tax, or whether it is their estimate of how much money he might possibly have earned by investing the £22million. I suspect it is the former.

So how does Ian’s 22½years compare with sentences for other crimes:

Raping a 22 year old stranger snatched off the street 12 years
Street gang who beat up and killed a stranger in an all night orgy of violence
1 member 3 members 8 years 12 years each
Borrowing (and returning) 3 buses from garages 8 months
Beating up a stranger including inflicting severe brain injuries which left him in a coma for 2 months - 18 months
Led a gang of 6 into a two person flat for people in care, tied up the two victims and pistol whipped one of them 10 years

I seem to recollect a lot of the newspapers recently talking about prison not being the right punishment for those who are unlikely to re-offend. I would have thought that Ian is unlikely to re-offend, and would still be unlikely even if he were not in his 70s by the time he completes his sentence. Accordingly we must presumably assume that the 22½years includes a massive discount for the fact that he is unlikely to re-offend, so as to make it comparable to the other sentences which are predicated on that basis.

I find the comparison fascinating. Personally I would not have thought that tax evasion was twice as heinous as snatching a 22 year old stranger off the street and raping her. Does society really think that? I suspect not, but the courts clearly do. Does this mean that the courts are not representative of the society or is it an indication that the judges would like society to adopt a concept of tax evasion being far more serious than virtually any other crime than murder?

Of course Ian’s offence is exceptional. Most tax evaders do not evade £22million. Equally though, most tax evaders know what they are doing. I do not know Ian Leaf. I have never met him. However the impression I get is that he did not consciously intend to evade tax. He thought that what he was doing was avoiding tax (which is legal) and a jury held that he was evading tax. I suspect I am not along in thinking that the punishment for deliberately committing a criminal offence ought to be longer than the punishment for doing so in circumstances where one believed that what they were doing was legal.

My thoughts turned to sentences for other tax offences. I accordingly went to the HMRC Prosecution’s website. There are 7 cases listed for the last year. These are of course cases where HMRC has opted to issue a press release. There may well be other cases in which it has not done so. I set out below the sentences. I have used the HMRC description of the fraudster. Most believe that people involved in tax such as Tax Inspectors, solicitors, accountants and magistrates are treated far more severely by the court than other people. Or are they? What do you think?

Former magistrate 9 months suspended
Tax cheat (former Inland Revenue employee) 4 years
Hairdresser (mother of 2 young children - £26,000 false claim) 5 months
Tax Inspector (£10,000 loss) 6 months
Tax fraudsters (£500,000 loss)
1 3 years
1 2 years
1 18 months
1 2 years suspended
Cheating Taxman (£300,000 loss) 3½years
Company director 1 year

Robert W Maas


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