It is HMRC’s stated policy to deal with fraud by use of the cost effective civil fraud investigation procedures under Code of practice 9 wherever appropriate. The Criminal Investigations Policy will followed in cases where HMRC needs to send a strong deterrent message or where the conduct involved is such that only a criminal sanction is appropriate.
HMRC reserves complete discretion to conduct a criminal investigation in any case and to carry out these investigations across a range of offences and in all the areas for which the Commissioners of HMRC have responsibility.
Examples where a criminal prosecution will be considered
There are certain fiscal offences where HMRC will not usually adopt the civil fraud investigation procedures under COP9, for example:
- VAT ‘bogus’ registration repayment fraud
- organised Tax Credit fraud
Examples where a criminal prosecution may be considered
These include cases where:
- organised criminal gangs are suspected of attacking the tax system or systematic frauds where losses represent a serious threat to the tax base, including conspiracy
- individual holds a position of trust or responsibility
- materially false statements are made or materially false documents are provided in the course of a civil investigation
- in the pursuance of an avoidance scheme, reliance is placed on a false or altered document. Alternatively reliance or material facts are misrepresented to enhance the credibility of a scheme
- deliberate concealment, deception, conspiracy or corruption is suspected
- false or forged documents are used
- involving importation or exportation breaching prohibitions and restrictions are involved
- money laundering is involved with particular focus on advisors, accountants, solicitors and others acting in a ‘professional’ capacity who provide the means to put tainted money out of reach of law enforcement
- the perpetrator has committed previous offences or there is a repeated course of unlawful conduct or previous civil action
- theft is involved, or the misuse or unlawful destruction of HMRC documents
- where there is evidence of assault on, threats to, or the impersonation of HMRC officials
- there is a link to suspected wider criminality, whether domestic or international, involving offences not under the administration of HMRC
One factor that will be key in determining whether a criminal investigation is undertaken or not is whether the taxpayer(s) has made a complete and unprompted disclosure of the offences committed.
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