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HMRC criminal prosecution is the biggest fear for those who are under UK tax investigation or have concerns regarding unpaid taxes or tax fraud.

HMRC CRIMINAL PROSECUTION GUIDANCE

HMRC adopt a highly selective approach when considering a criminal prosecution during a UK tax investigation. Whilst they do publish freely available policy guidance, there is no strict rule of thumb. In this article we attempt to break down the language of HMRC criminal prosecution guidance and clear up some common misconceptions. As always if you have any concerns regarding your tax affairs then you should immediately seek advice from a tax investigation specialist. This is particularly important if your concerns revolve around an HMRC criminal prosecution.

HMRC CRIMINAL PROSECUTION POLICY

Firstly let us look at HMRC criminal prosecution published policy. What criteria will the department apply when considering a criminal proceedings.

Examples of the kind of circumstances in which HMRC will generally consider commencing a criminal, rather than civil tax investigation are:

  1. Instances of organised criminal gangs attacking the tax system or systematic frauds where losses represents a serious threat to the tax base, including conspiracy
  2. When materially false statements are made or materially false documents are produced in the course of a civil investigation
  3. Where the perpetrator has committed previous offences or there is a repeated course of unlawful conduct or previous civil action
  4. In cases involving the use of false or forged documents
  5. 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;
  6. Where an individual holds a position of trust or responsibility
  7. In cases involving importation or exportation breaching prohibitions and restrictions
  8. Where deliberate concealment, deception, conspiracy or corruption is suspected
  9. In cases involving money laundering 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
  10. Where there is a link to suspected wider criminality, whether domestic or international, involving offences not under the administration of HMRC
  11. In cases involving theft, or the misuse or un lawful destruction of HMRC documents
  12. Where there is evidence of assault on, threats to, or the impersonation of HMRC officials

Clearly some of the above instances are more prevelant than others, so for the purposes of clarity and brevity let us focus on the what we consider to be the key areas of HMRC criminal prosecution policy.

UNPROMPTED OR VOLUNTARY DISCLOSURE

This is absolutely key and something we emphasise to all clients, prospective or otherwise. An HMRC criminal prosecution will very rarely be considered in cases where a full and unprompted Voluntary disclosure is made. There are exceptions, such as instances of VAT carousel fraud, but if you come forward and more importantly come clean, HMRC will almost always deal with you using their civil UK tax investigation powers. You may owe some tax of course, but can that measured in any way next to you liberty.

If you are subject to an HMRC tax investigation or have concerns regarding unpaid taxes and decide to make a voluntary disclosure it is certainly no time for half truths or half measures. Remember in the strictest sense you have committed tax fraud. If you have any questions regarding HMRC criminal prosecution policy or need further tax investigation advice then call us on 0330 999 5000. If you find it inconvenient to talk why not drop us an email using the information on our contact page.