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Criminal Investigations

HM Revenue & Customs (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.

In England and Wales these powers are made available through the Police and Criminal Evidence Act 1984 (PACE). In Northern Ireland they are made available through the Police and Criminal Evidence (Northern Ireland) Order 1989. Not all the powers in PACE are made available to HMRC. For example, HMRC does not take fingerprints, charge or bail suspects. This has to be done by the police. Some of the powers in PACE 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.

HMRC Criminal Investigation Policy

Criminal investigation, with a view to prosecution by the Revenue and Customs Prosecutions Office (RCPO) in England and Wales – or the appropriate prosecuting authority in Scotland and Northern Ireland, is an important part of HMRC's overall enforcement strategy.

It is HMRC's policy to deal with fraud by making use of the cost effective Civil Investigation of Fraud (CIF) procedures, wherever appropriate. 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.

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

• in 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
• in cases involving the use of false or forged documents
• in cases involving importation or exportation breaching prohibitions and restrictions
• in 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
• in 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 Civil Investigation of Fraud 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.
 

Call our helpline 020 7842 7200 for a free no obligation discussion or email investigations@crowecw.co.uk. Alternatively, please complete our enquiry form and one of our team will contact you.