Tax evasion

I found out late in the evening. The whole of that night I spent checking and re-checking, trying not to panic.

Then in the office the three of us checked it all through again. I still hoped I was wrong. But no. 

There it was – the mistake that meant we had seriously misreported in the submissions we’d made, on the basis of which we’d just paid our tax bill. 

We were never not going to tell them, but we decided it would be better if we could go back through things to work out exactly how it had happened. 

So it wasn’t until a few weeks later that we’d prepared what we thought would be an acceptable explanation. I just wish we hadn’t delayed.

I thought they’d be sympathetic – but they weren’t. Their view was that what we’d presented them with was an attempt to ‘whitewash’ a serious attempt to defraud the government of tax legally due. 

When I repeated that it was just ‘an honest mistake’ they said that was still to be determined, and besides there should have been no mistakes – honest or dishonest. 

It turned into a real trauma. We had to go back through several years and prove that we hadn’t at any point sought to evade the tax due. Hundreds and hundreds of hours of work. 

And on top of that - and I really don’t know how it happened – someone let the story out on social media that we were being investigated for tax fraud. 

The story was ‘investigated for’ but it may as well have been ‘guilty of’. 

It was absolute hell for all of us. And it still hasn’t died down, even though we’ve paid the massive fine and been cleared of deliberate tax evasion. 

In the last meeting we had there was just one guy from the tax office. I asked him what we could have done to avoid all this – apart from making the mistake in the first place.

He thought about it and then said, ‘You know, if you’d reported it straight away, as soon as you knew, you’d probably have been alright. But when people wait and hide the truth until they’ve got their presentation together, what else can we do but assume ‘intent to defraud?’ 

Even if there was no intention to evade tax, just the appearance of it could have very serious consequences for individuals and for Serco.

If we think something isn’t right, or we’re concerned, we always Speak Up straight away. 

The sooner we do that, the better our chances of putting any error right before it does damage.

He was a brilliant accountant and such a nice guy. He had real expertise in the complexities of international financial laws. If there was  something you didn’t understand or any problem you had, and you could go to him and he’d work out a solution. We all felt very lucky that he was on our team. As someone said, ‘He’s such a gentleman.’

For a while we’d all been working around COVID, and were only gradually coming back to the office. Tuesdays was the day I went in. He was there, and a few others. It was one of those days when it’s quiet – people aren’t really talking much, just working. So we all heard the great crashing sound in reception.

A couple of people rushed out to the stairwell to look. Then they were walking backwards through the doors with their hands in the air – and a moment later three armed men came through pointing guns. I thought they were terrorists. But they weren’t – they were police.

The next few hours were frightening. We were all put in vans and take down to the police station. They separated us. I was put in cell that smelt so much of bleach I kept coughing – and wondering what on earth was happening. 

After about three hours they came for me. I was taken to an interview room. There was a recorder there, the interviewer and someone in a jacket. They asked me over and over what I knew about our accountant and I just kept telling them that he was great and really good at his job. 

He certainly was. It turns out that he’d been moonlighting for a very important client – helping them to evade the tax they owed not just in this country but across the region. 

I kept repeating that none of us knew and our company wasn’t involved in anyway. But because he’d used our systems to encrypt and transfer files across borders, we were implicated. I remember the interviewer leaning forward, looking straight into my eyes and saying, ‘If we find anything that tells us a different story, let me make it very clear – you will go to prison, along with your colleagues. And your company will be finished here.’

Fortunately for us the accountant admitted everything, and was very thorough in the way he showed them how he had worked entirely alone. I suppose in that sense at least he was a gentleman - though whether that helped him in prison isn’t something I want to think about.

Evading tax is essentially fraud – it defrauds society.

That’s why it is such a serious criminal offence, and why there are severe penalties for anyone caught trying to evade tax.

We never evade tax at Serco.

I’d just come in from a round of golf and there in the clubhouse was the CEO of one of our biggest clients. He was sitting with another man I recognised, a local doctor.

‘Come and join us,’ the CEO boomed cheerfully. ‘Waiter, over here.’

He was a larger-than-life character and fond of a drink. The doctor, by contrast, was a rather solemn man known for his strong social conscience. They were in the middle of a conversation about the government’s plan to build a second parliament complex at the other end of the country.

‘I was just saying,’ the doctor told me, ‘what a ridiculous waste of money it is. They could build three hospitals with what they’re spending on that stupid building. And the worst thing is it’s my money they’re using to do it.’

The CEO shrugged his shoulders.

‘And I keep telling you, it’s down to you to stop them doing it.’

‘But they make the rules, we don’t have any choice!’ the doctor protested.

The CEO sighed and turned to me. ‘What do you think then?’

I said something diplomatic about sticking to the rules even if you didn’t like them.

‘Then more fool you!’ he said. He leant forward conspiratorially. ‘Listen. The number one rule about rules is that rules are there to be broken.’

He was slurring his words slightly, he’d obviously had a couple. ‘If you don’t want them to waste your money, it’s up to you not to let them get their hands on it in the first place. Everybody knows that.’

The doctor looked shocked. ‘Are you saying your company avoids paying tax?’

‘I couldn’t possibly comment on that,’ the CEO cackled. Then, sensing that he might have gone too far, he changed the subject.

I‘ve been agonising what to do ever since. If I do nothing and he gets caught for tax evasion, Serco’s reputation could be severely damaged. But if I push it with him or report what I’ve heard, we’ll almost certainly lose him as a client. Somebody please tell me what I do next.

We have zero tolerance for tax evasion, and never try to evade tax or help anyone else to do it anywhere