HMRC Publishes Criminal Investigation Policy

by Jason Gorringe, Tax-News.com, London

02 January 2006

HM Revenue and Customs has released its latest criminal investigation policy as it attempts to secure the "highest level of compliance" with the law and regulations governing direct and indirect taxes.

According to HMRC, policy is to deal with fraud by use of the cost effective Civil Investigation of Fraud (CIF) procedures and criminal investigation will be reserved for cases where a strong deterrent message needs to be sent out, 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 civil investigation are:

• In cases of organised or systematic fraud 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 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;
• Where the perpetrator has committed previous offences / there is a repeated course of unlawful conduct or previous civil action;
• In cases involving theft, or the misuse or unlawful 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 will be whether the taxpayer(s) has made a complete and unprompted disclosure of the offences committed.

However, there are certain fiscal offences where HMRC will not usually adopt the Civil Investigation of Fraud approach. These are:

• VAT Missing Trader Intra-Community (MTIC) Fraud
• Vat 'Bogus' registration repayment fraud
• Organised Tax Credit fraud

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