Criminal

Cheating the Inland Revenue - failure to declare business profits resulting in underpayment of tax - confiscation orders made based on underpayment together with interest - pecuniary advantage not including whole of defendant's undeclared profitsR v Moran: CA (Lord Justice Mantell, Mr Justice Rougier and Mr Justice Grigson): 27 July 2001The defendant pleaded guilty to offences of cheating the Inland Revenue which related to his failure fully to declare business profits over about 20 years.

The judge imposed a term of nine months' imprisonment, together with a confiscation order representing the amount of the underpayment of tax plus interest.

The judge found that on a proper reading of the relevant provisions within section 71(5) of the Criminal Justice Act 1988 (without regard to amendment by legislation later than the Criminal Justice Act 1993), it was not possible to treat the whole of the defendant's undeclared profits as available for confiscation as a 'pecuniary advantage'.

The Attorney-General sought leave to refer the sentence to the court as unduly lenient and challenged that finding.David Perry and Robin McCoubrey (instructed by Solicitor of Inland Revenue) for the Attorney-General.

Timothy Holroyde QC and Dennis Talbot (instructed by Llewellyn-Jones, Ruthin) for the defendant.

Held, granting leave but declining to interfere with the sentence, that there was no direct authority to assist in construing the term 'pecuniary advantage' within section 71(5); that the pecuniary advantage was represented by the underpayment of tax resulting from the failure fully to disclose profits and included any interest accrued or investment returned upon that sum, but that it did not include the balance of profits which were the product of lawful trading, which could not be said to constitute a pecuniary advantage which had resulted from, or come about in connection with, the commission of an offence.