Overview of criminal investigations

Produced by Tolley

The following Value Added Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Overview of criminal investigations
  • Types of offences warranting criminal investigation
  • Classification of offences
  • Offences arising under tax legislation
  • Offences arising under customs and excise legislation
  • Offences arising under general criminal law
  • Evasion of tax
  • False documents
  • False statements
  • Criminal conduct
  • More...

Overview of criminal investigations

Most 'wrongdoing' cases (ie cases where the business has failed to deal with its VAT affairs correctly and VAT has been under paid as a result) will be resolved using civil procedures, with or without penalties. However, on occasion, HMRC may consider that the wrongdoing may be sufficiently serious for a criminal investigation to be required.

Please see the Managing serious defaulters guidance note for more information on civil investigations.

Further information can be found in EM0600 and Criminal justice and investigations .

Types of offences warranting criminal investigation

Currently the offences which are considered to be 'heinous' and therefore merit criminal investigation are:

  1. attacks on the tax system by organised criminal gangs and systematic frauds, including conspiracy, where losses represent a serious threat to the tax base

  2. cases involving an individual in a position of trust or responsibility – typically a solicitor, barrister or an accountant

  3. submission of materially false statements or documents in the course of a civil investigation

  4. tendering of false or altered documents, or the misrepresentation of material facts in support of an avoidance scheme

  5. deliberate concealment, deception, conspiracy or corruption

  6. the use of false or forged documents

  7. importation or exportation involving breaches of prohibitions or restrictions

  8. money laundering (note that HMRC is particularly likely to undertake a criminal investigation in cases involving accountants, solicitors and other professionals). Please see MLR1PP2000

  9. repeat offenders who have committed similar acts previously

  10. theft, misuse or unlawful destruction of HMRC documents

  11. impersonation of or threatening / assaulting an HMRC official

  12. persons or businesses that are linked to suspected wider criminality, whether domestic or international, involving non-revenue offences

Please see CH27200.

HMRC has also indicated that it will seek a criminal prosecution for the following fiscal offences:

  1. VAT missing trader Intra-Community (MTIC) fraud (see Domestic reverse charge ― overview)

  2. VAT 'bogus' registration repayment fraud, and

  3. organised tax credit fraud

Classification of offences

Offences that are connected with VAT are usually classified under the following three headings.

Offences arising under

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