A paradoxical effect of more aggressive action against tax evaders by UK authorities has been that average gaol terms for offenders has sharply declined, a law firm says.

The average length of gaol time spent by tax evaders in the UK has fallen sharply but this isn’t because the law has become more lenient – it is because the authorities are going after more marginal cases, a law firm argues.

The pursuit of smaller cases means that the average custodial sentence for criminal tax evaders has slumped by 60 per cent over the past four years, down to 17.7 months in 2014, Pinsent Masons said in a report. The total number of tax evaders given a custodial sentence has risen by around 30 per cent over the same period, from 171 in 2011 to 220 in 2014, it said.

Looked at in full context, the decline in the average custodial sentence suggests HM Revenue & Customs, the UK tax authority, is making broader use of its prosecution powers against tax cheats and pushing for maximum available punishments.

“HMRC wants to make examples of tax evaders by sending more of them to prison. It is no longer focusing narrowly on the very wealthiest culprits, guilty of the most serious evasion. It is clamping down on tax evaders from all walks of life and adopting a much more aggressive stance when it comes to pushing for criminal sanctions,” Fiona Fernie, partner and head of tax investigations at the firm, said.

“HMRC is also likely to be coming down harder on taxpayers who have been offered settlement terms in return for a full declaration of any unpaid tax - in the course of a COP9 investigation or via an offshore disclosure facility such as the LDF, for example - but have failed to fully disclose. The original tax offence may not have been serious or clear cut enough to warrant a custodial sentence, but making a false statement or an incomplete disclosure to HMRC may,” she said.

(Fernie was referring to the Liechtenstein Disclosure Facility that was set up by the UK and Liechtenstein governments about five years ago to deal with undisclosed accounts in the tiny European jurisdiction.)

HMRC created what is called the Affluent Unit in 2011 to deal with cases falling outside those deemed to involve the wealthiest members of society.