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.

Help is at hand

If you would like to discuss this matter further, please contact me at paul@pmc.tax or on 07979 313 010.