Overview of criminal investigations

By Tolley

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

  • Overview of criminal investigations
  • Types of offences warranting criminal investigation
  • Classification of offences
  • Current HMRC criminal investigation policy
  • HMRC’s criminal investigation powers
  • Time limit for commencing criminal proceedings
  • What happens if the matter goes to trial?
  • Penalties
  • Confiscation orders
  • Compounding
  • Intrastat - imposition of criminal penalties
  • Corporate offence of the failure to prevent the facilitation of tax evasion

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.

FA 2007, ss 82–86, Sch 23; De Voil Indirect Tax Service V5.302 (subscription sensitive)

Please see the guidance note Fraud civil investigation - COP9 offer made from 30 June 2014 - overview 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:

  • attacks on the tax system by organised criminal gangs and systematic frauds, including conspiracy, where losses represent a serious threat to the tax base
  • cases involving an individual in a position of trust or responsibility – typically a solicitor, barrister or an accountant
  • submission of materially false statements or documents in the course of a civil investigation
  • tendering of false or altered documents, or the misrepresentation of material facts in support of an avoidance scheme
  • deliberate concealment, deception, conspiracy or corruption
  • the use of false or forged documents
  • importation or exportation involving breaches of prohibitions or restrictions
  • money laundering (note that HMRC is particularly likely to undertake a criminal investigation in cases involving accountants, solicitors and other professionals). Please see MLR1PP2000
  • repeat offenders who have committed similar acts previously
  • theft, misuse or unlawful destruction of HMRC documents
  • impersonation of or threatening / assaulting an HMRC official
  • persons or businesses that are linked to

More on Investigations: