HMRC is increasingly using criminal investigations across a range of offences.
HMRC’s criminal investigation policy
Criminal investigation, with a view to prosecution by the Crown Prosecution Service, is an important part of HMRC’s overall enforcement strategy.
Criminal Investigation will be reserved for cases where HMRC needs to send a strong deterrent message or where the conduct involved is such that only a criminal sanction is appropriate. However, 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.
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What HMRC can do
HMRC has powers to:
- apply for orders requiring information to be produced – production orders
- apply for search warrants
- make arrests
- search suspects and premises following an arrest
HMRC does not take fingerprints, charge, or bail suspects. This has to be done by the police. Some of the powers are modified for HMRC. For example, a search warrant may allow HMRC to search persons found on the premises without the need for arrest. This allows HMRC to search a bookkeeper who may have evidence in a briefcase or laptop when a company’s premises are searched, but who is not considered a suspect.
Examples where HMRC will consider a criminal investigation
- Cases of organised criminal gangs attacking the tax system or systematic frauds where losses represent a serious threat to the tax base, including conspiracy.
- Where an individual holds a position of trust or responsibility.
- Where materially false statements are made or materially false documents are provided in the course of a civil investigation.
- Where, pursuing an avoidance scheme, reliance is placed on a false or altered document or such reliance or material facts are misrepresented to enhance the credibility of a scheme.
- Where deliberate concealment, deception, conspiracy or corruption is suspected.
- Cases involving the use of false or forged documents.
- In cases involving importation or exportation breaching prohibitions and restrictions.
- Cases involving money laundering with particular focus on advisers, accountants, solicitors and others acting in a ‘professional’ capacity who provide the means to put tainted money out of reach of law enforcement.
- Where the perpetrator has committed previous offences there is a repeated course of unlawful conduct or previous civil action.
- Cases involving theft, misuse or un lawful destruction of HMRC documents.
- Where there is evidence of assault on, threats to, or the impersonation of HMRC officials.
- Where there is a link to suspected wider criminality, whether domestic or international, involving offences not under the administration of HMRC.
When considering whether a case should be investigated under the CDF procedures or is the subject of a criminal investigation, one factor to be considered is whether the taxpayer has made a complete and unprompted disclosure of the offences committed.