HMRC Criminal Investigations

How our criminal tax lawyers can help

With decades of experience in handling HMRC criminal investigation cases, our criminal tax lawyers are well placed to support you. We have successfully assisted clients in situations similar to yours throughout the entire process:

• We can advise and defend all forms of HMRC fraud, criminal tax evasion, and HMRC investigations and inquiries.
• The team offers immediate response for advice and assistance for dawn raids, arrests and interviews under caution.
• We have an established network of independent tax consultants, forensic tax accountants and specialist tax barristers that we can involve in your case if required.
• We can help avoid an HMRC criminal investigation if one has not already started, by carefully managed and appropriate disclosure to HMRC where suitable.
• Solicitors have a special status called legal professional privilege, meaning all communications between our criminal tax lawyers and their clients cannot be disclosed without the permission of the client.
• If you require a tax assessment and tax affairs report, we can instruct an account on your behalf.

Contact our team of specialists today to discuss the support we can provide.

Understanding HMRC criminal investigation policy

If you have received a HMRC criminal investigation letter (known as a Criminal Tax Investigations & Section 144 Notice) or suspect that investigations may be ongoing, it is imperative that you understand the relevant policy and act fast.

Below, we have outlined the potential reasons why this type of investigation may be launched, and the powers that the HMRC criminal investigator can use against you.

Reasons for an HMRC investigation

HMRC criminal investigations are likely to occur when HMRC suspects:

• Deliberate filing of inaccurate Tax Returns or VAT Returns including income tax evasion;
• Deliberate failure to file Tax Returns or VAT Returns;
• Use of false or forged documents;
• Concealment, deception, or corruption;
• Failure to provide full and accurate disclosure in an investigation or settlement;
• Money laundering;
• Conspiracy with others to evade tax or duty;
• Involvement of a professional (tax adviser, accountant or lawyer), particularly if they advise or act for taxpayers (as they will be viewed as ‘a source of infection’);
• VAT Missing Trader Intra-Community (MTIC) or carousel fraud;
• VAT ‘bogus’ or ‘hijacked’ registration repayment fraud;
• Breach of import or export prohibitions or restrictions (‘sanctions busting’);
• A Contractual Disclosure Facility (CDF) has been offered under Code of Practice 9 (COP9) but the taxpayer has chosen to reject/ignore the offer.

Powers of the HMRC criminal investigator

The HMRC Criminal Investigator has strong powers. According to the Financial Times, dawn raids by the Financial Conduct Authority are at their highest level in almost a decade, and are often accompanied by the arrest of the taxpayer. Routinely, HMRC will also covertly obtain warrants and court orders to require banks, advisers and even accountants to provide records and financial information about a taxpayer.

HMRC also has the power to apply without notice (ie. behind closed doors) for a Restraint Order under the Proceeds of Crime Act (POCA) to freeze all the assets of the person being investigated until the outcome of the investigation and any subsequent court proceedings.

In the last year, HMRC’s Criminal Investigation team lived up to its previous promise by bringing nearly 1300 tax fraud prosecutions resulting in a total of over 400 years in prison sentences. As well as some high profile, serious cases this confirmed a toughening approach as many cases involved relatively minor tax evasion, VAT evasion, and duty evasion such as tobacco, alcohol smuggling, and fuel duty (especially red diesel).

Confiscation Orders and other powers

The HMRC Criminal Investigation team will always consider additionally seeking a Confiscation Order under the Proceeds of Crime Act (POCA) to obtain the tax involved plus interest, following a successful prosecution. Some very draconian financial assumptions can be made against the individual. A confiscation order is always backed up by a default sentence of imprisonment for non-payment (in addition to any other sentence).

HMRC has also created a new Fraud Investigation Service (from a merger of its previous Specialist Investigations and Criminal Investigations units) and has repeated that they will be active in maintaining a similarly high rate of investigations and prosecutions going forward.

Our HMRC criminal investigation lawyers have significant experience in defending some of the largest tax prosecutions in the country. Their proven track record includes cases with a significant international dimension and multi-million-pound frauds and high profile individuals.

Should I choose a solicitor or an accountant to assist with a HMRC criminal investigation?

If you are considering instructing an accountant or a solicitor, you should be aware that information you provide to your solicitor enjoys a special status called legal professional privilege.

Your accountant cannot provide this protection, although they may be able to gain it if they are instructed by a solicitor. If there is to be an assessment of the tax due and a report prepared about your tax affairs, we can instruct an accountant on your behalf.

Get in touch today and talk through the details of your case with our HMRC criminal investigation specialists.