Tax Evasion
Tax evasion also known as tax fraud should not be confused with tax avoidance (the legitimate structuring of an individual’s tax affairs to ensure the lowest possible tax bill).
Tax evasion involves deliberate conduct ('mens rea') on the part of a sole trader, partner or company director etc, in order to evade paying the proper amount of tax. Tax fraud can lead to a criminal investigation and potential prosecution unless handled by a properly qualified tax investigations specialist.
Where HM Revenue & Customs ('HMRC') suspect individuals of tax evasion (an example being the deliberate concealment of cash extractions), they may use the Civil Investigation of Fraud procedures to obtain a civil monetary settlement instead of pursuing a criminal investigation, except where the behaviour is 'heinous' and falls within HMRC’s criminal investigation policy, and it is necessary to send out a warning.
The Civil Investigation of Fraud procedures are set out in HMRC’s Code of Practice 9 booklet. The recipient of Code of Practice 9 is guaranteed immunity from prosecution for the original tax fraud. However, HMRC may still decide to prosecute should the individual falsify documents or lie during the Civil Investigation of Fraud disclosure process or should the individual submit a partial or incomplete disclosure.
As part of the procedure an individual will be routinely invited to a meeting with HMRC to answer a series of questions, and to make a general outline disclosure. The individual then commissions a detailed disclosure report setting out the nature and amount of the tax fraud. During the report preparation period, HMRC recommends that payments on account of the final liability are paid as they become obvious.
The total amount payable to HMRC in respect of the tax offences not only includes the tax due, but also statutory interest (i.e. for late paid tax), and a penalty which is based on a percentage of the tax due.
Why should you contact us?
We have a dedicated team of former tax inspectors, who have a significant amount of experience in handling civil investigations of fraud cases. We can assist in drafting the disclosure report quantifying tax risks and negotiating with HM Revenue & Customs.
Our specialist team can offer immediate support with a confidential free initial consultation.
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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.