- .Tax Tribunal Appeals
- .HMRC Seized Goods
- .HMRC Inspections
- .Civil Investigations of Fraud and Disclosure
- .Conspiracy to Defraud
- .Excise Duty Fraud
- .HMRC Criminal Investigation
- .HMRC Interview Under Caution
- .HMRC Litigation – Bankruptcy or Winding Up Proceedings
- .HMRC Regulatory Advice
- .Involvement in Tax Avoidance Schemes
- .Non-payment of Income Tax
- .PAYE and Payroll Fraud
- .Research and Development Tax Fraud
- .Tax Credit Fraud
- .Tax Dispute Resolution
- .Tax Evasion and Penalties
- .Tax Investigation Criminal Proceedings
- .Tax Investigations
- .Tax Tribunal
- .VAT Compliance and Inspection
- .VAT Missing Trader Intra-Community Fraud (MTIC)
- .VAT Repayment Fraud
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Tax Investigation Criminal Proceedings
Once the tax evasion investigation process has been completed, HMRC will notify you of whether or not you are going to face criminal proceedings. If your tax fraud investigation finds that you’ve been fraudulent, you will be liable for a penalty.
Tax investigation penalties can be anything from paying back the tax you owe, to having to pay back 200% of the tax due. For more serious offences, offenders face unlimited fines and prison sentences.
Types of tax fraud offences
There are five principal tax fraud offences in the UK. These are:
- Cheating the public revenue
- Fraudulent evasion of income tax
- Fraudulent evasion of VAT
- Providing false documents or information to HMRC
- Fraudulent evasion of excise duty on imported goods or smuggling goods
Let’s look at these offences in more detail.
Cheating the public revenue
This is a common-law offence, which includes any form of fraudulent conduct that deprives the HMRC of funds it is entitled to. However, this offence is usually reserved for more serious tax fraud cases.
Cheating the public revenue carries a maximum penalty of life imprisonment and an unlimited fine.
Fraudulent Evasion of Income Tax
The Taxes Management Act 1970 imposes criminal liability of any person who is ‘knowingly concerned’ with the dishonest tax evasion of themselves or another person.
What does ‘knowingly concerned’ mean? This is a legal term, which refers to having both knowledge (not just a bit of suspicion), and actual involvement in the fraud itself.
The maximum sentence for this crime is up to seven years imprisonment, and an unlimited fine.
Fraudulent Evasion of VAT
In England and Wales, VAT is added onto the supply of most goods and services, including acquired and imported goods from countries both within and outside of the EU. If you own a business that supplies goods or services, you are required to register with HMRC for VAT purposes, if your annual turnover exceeds a prescribed limit.
You may be found guilty of fraudulent evasion of VAT if you:
- Know money is owed to HMRC, but fail to register with HMRC
- Acquire possession of goods or services, knowing that the VAT has been evaded
- Make a false statement to HMRC regarding VAT
For most VAT offences, the maximum penalty in England and Wales is up to seven years imprisonment and an unlimited fine.
False Document & Information Submission to HMRC
This offence is split into two offences, one is a strict liability offence (it requires no proof of intention), and the other is to ‘knowingly or recklessly’ give false information to HMRC, which means the defendant meant to be dishonest with HMRC, or they were reckless with the information they gave, which turned out to be untrue.
The strict liability offence may only be tried in a Magistrates court, and can result in a fine of up to £20,000. The second offence can result in a fine of up to £20,000 or up to a six month prison sentence.
Fraudulent Evasion of Duty
These are known as ‘smuggling offences’, and involve the intentional evasion of paying tax on various goods (for example, tobacco, alcohol, goods imported from outside the EU and goods imported from within the EU).
The maximum penalty for fraudulent evasion of duty is up to seven years imprisonment and an unlimited fine.
What should I do if I’ve been accused of tax fraud?
If you’ve been accused of tax fraud, you should seek professional advice from a tax solicitor right away. Our team of dedicated tax lawyers are on hand to provide you with reliable tax advice and counsel, so contact us today to discuss your next steps.
When it comes to tax services, our solicitors have a reassuring amount of experience. We’ve been defending fraud cases for more than twenty years.
Additional resources are now being directed by HMRC to identify and tackle tax avoidance, tax evasion and organised criminal attacks on the system.