Criminal fraud arises, broadly, where a person knowingly takes steps to evade tax, or to enable another person to do so.

The penalties for criminal fraud apply, not only to the concealment of liability to account for tax, but also to such matters as the overstatement of claims for the repayment of input tax.

A criminal fraud penalty can only arise as a result of criminal proceedings, in which case the level of penalty depends whether the conviction secured is a summary conviction (i.e. before magistrates) or a conviction on indictment (i.e. before a jury). In either case, the penalty consists of a fine and/or imprisonment.

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