Tax Fraud – A representation in the legal sense need not be a statement at all!

‘Tax fraud usually involves either positive deception of the tax authorities or breach of duties of disclosure imposed by the tax legislation. It will usually, therefore, involve the commission of fraud by false representation, fraud by failing to disclose information or both. Often the particular form of deception adopted will give rise to liability for false accounting, forgery or the making of false statements contrary to the Perjury Act 1911 section 5(b).’ (Arlidge And Parry on Fraud, Sixth Edition (2020), by Jonathan Fisher KC, HHJ Alexander Milne KC, Jane Bewsey KC, and Andrew Herd, Sweet & Maxwell, paragraph 14-001). See also chapter 4 – ‘False representations and deception.’ Note, that section 2(3) of the Fraud Act 2006 (‘FA 2006’) provides that, ‘Representation’ means ‘any representation’ but does not say what a representation is. Section 2 of FA 2006 provides:

‘Fraud by false representation

(1)     A person is in breach of this section if he—

(a)     dishonestly makes a false representation, and

(b) intends, by making the representation—

  • to make a gain for himself or another, or

(ii)     to cause loss to another or to expose another to a risk of loss.

(2)     A representation is false if—

(a)     it is untrue or misleading, and

(b)     the person making it knows that it is, or might be, untrue or misleading.

(3)     “Representation” means any representation as to fact or law, including a representation as to the state of mind of—

(a)     the person making the representation, or

(b)     any other person.

(4)     A representation may be express or implied.

(5)     For the purposes of this section a representation may be regarded as made if it (or anything implying it) is submitted in any form to any system or device designed to receive, convey or respond to communications (with or without human intervention).’

Therefore, the ‘legal meaning of the word representation is wider than its ordinary meaning. … In the civil law of misrepresentation … A representation can certainly be implied rather than express. Less obviously, a representation in the legal sense need not be a statement at all. It is sufficient that D has led V to believe that something is true, without in any real sense asserting it to be true.’ (Arlidge And Parry, paragraph 4-008).