According to law firm Pinsent Masons, HM Revenue & Customs (HMRC) reported 2,888 suspected cases of tax evasion in 2012-13, down 16% – from 3,456 – on the previous 12 months and the lowest since 2007-8.

HMRC defines tax evasion as “serious” when the sum involved is higher than £50,000 or if the case is considered worthy of prosecution.

Phil Berwick, a partner at the law firm, said:”This decline in suspected tax evasion doesn’t tally with the rhetoric from some quarters that the British economy is being undermined by a chronic under-collection of tax revenues.

“HMRC has plenty of tools at its disposal to catch tax evaders which serves as a huge deterrent to those considering tax evasion.”

HMRC has been granted a raft of new powers in recent years to tackle tax evasion, including increasing the number of tax inspects and giving it the right to impose penalties of up to 200% of the original tax owed if an individual does not declare any income or capital gains that has been hidden from HMRC in an offshore bank account.