Tax Disputes & Investigations

Criminal Tax Investigations

Tax avoidance is the lawful arrangement of one's affairs so as to reduce or avoid a liability to tax that might otherwise arise. Tax evasion is unlawful.

HM Revenue & Customs (HMRC) believes that over 1.5 million individuals and some 300,000 businesses are not paying the correct amount of tax due to fraud, evasion and/or criminal attack. In January 2011, the National Fraud Authority (NFA) published its first fraud loss estimate across all sectors of the UK plus losses against individuals. The NFA estimated that tax fraud cost the UK Exchequer £15billion a year, broken down as follows:-

• An estimated £7billion a year due to 'Evasion' where individual or corporate taxpayers have deliberately omitted, concealed, or misrepresented information in order to reduce tax liabilities;
• An estimated £5billion a year due to 'criminal attacks' on the tax system involving co-ordinated and systematic attacks by organised criminal gangs; and
• An estimated at £3billion a year due to 'Hidden Economy' fraud consisting of undeclared economic activity from sources deliberately concealed from HMRC.

HMRC is responsible for investigating suspected criminal activity across the whole range of its responsibilities throughout the UK, including tax fraud and tax credit fraud involving organised crime. HMRC must carry out criminal tax investigations effectively if it is to protect the Exchequer, deter crime and reduce the social harm that crime causes whilst helping to deliver fairness.

HMRC's Criminal Investigation Policy states that HMRC has complete discretion to conduct a criminal investigation in any case, particularly where it feels it needs to send a "strong deterrent message" or where it feels the case is so serious ("heinous") that only a criminal sanction is appropriate.

That said, not every criminal tax investigation results in a successful criminal prosecution. Historically, HMRC's policy has mainly been to deal with suspected tax fraud/evasion via its Civil Investigation of Fraud (CIF) procedures. Where a taxpayer is investigated using the CIF procedures, but makes materially false disclosures then HMRC will often feel it has no option but to prosecute.

Criminal investigation cases are conducted by HMRC's Criminal Investigation Directorate, which has approximately 2,000 staff located throughout the UK. In most criminal tax investigations, HMRC seeks to secure evidence of serious tax fraud by way of Raids & Search Operations. Historically, tax prosecutions have only represented a small minority of the cases where serious tax fraud is suspected the main offences deployed to charge suspected tax evaders are:-

• Fraud, under Section 1 of the Fraud Act 2006;
• False accounting under Section 17 of the Theft Act 1968;
• Fraudulent evasion of VAT under Section 72 of Tax Act 1994; and
• Fraudulent evasion of Income Tax under Section 144 of the Finance Act 2000.

In September 2010, the Chief Secretary to the Treasury announced that there would be a five-fold increase in prosecutions for tax fraud. The Comprehensive Spending Review in October 2010 confirmed that £900 million of savings made by HMRC would be 'ring-fenced' and allocated to tackling evasion and avoidance. To achieve this, HMRC must change the way it investigates tax fraud and must now criminally investigate more cases. Therefore, cases that might previously have been dealt with under the CIF procedure will now be criminally investigated by HMRC.

How can OneE TDI help?

Despite HMRC's target to prosecute more tax fraud cases the reality is that if you come forward and make a full voluntary unprompted disclosure (either separate to or via one of HMRC's disclosure campaigns) then you will minimise the likelihood of you being criminally investigated. Therefore, if you know or suspect that you need to disclose undeclared income, profits and/or gains to HMRC, whether they arise in the UK or offshore, OneE TDI can successfully manage the disclosure process to protect you from potential criminal investigation and prosecution. We have up-to-date knowledge of all HMRC campaigns and disclosure facilities and offer confidential, non-judgemental advice to best defend our clients. Our advice saves our clients time and money and helps reduce their potential exposure to tax, interest and penalties.

At the core of OneE TDI is a highly experienced team specialising in all areas of tax disputes and investigations work. We are former HMRC inspectors/investigators – so we know how HMRC thinks! We are constantly dealing with inspectors/investigators so we have up to date insights into current practice and policy and consistently negotiate the best possible terms for our client without the case being criminally investigated or prosecuted.

If you find yourself subject of an HMRC criminal tax investigation you should immediately seek specialist representation to best protect your liberty, your reputation and your assets. OneE TDI works closely with the UK's leading criminal defence lawyers and we have a proven track record in defending clients under criminal tax investigation and working to change the investigation from Criminal to Civil. Our Expert Witness & Forensic service includes a thorough review of any tax fraud allegation and the examination of any tax loss claims/computations put forward by HMRC providing alternative arguments/computations where appropriate.

Please see the Testimonials kindly provided by our clients (or their accountants or lawyers), which confirm our levels of client service.

How can I contact OneE TDI?

If you would like a free, confidential, no obligation discussion with us please contact either Gary Rowson or Mark Taylor on 0800 652 6156 or complete and submit the online form below.

Whilst we endeavour to provide informative and accurate information, the content on this site is for general information purposes only and should not be taken to constitute tax or legal advice which must always be tailored to individual circumstances. Please contact us if you would like to discuss matters.

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