HMRC criminal tax investigation services

HMRC is responsible for investigating suspected criminal activity across the breadth of direct and indirect taxes throughout the UK, and HMRC’s criminal investigation policy states that it has complete discretion to conduct a criminal tax investigation in any case.

Historically, HMRC’s policy has been to deal with suspected tax fraud/evasion via its Code of Practice 9 (COP9)/Contractual Disclosure Facility procedure, and this continues to be its preferred option. The number of criminal investigations being opened by HMRC is increasing, however, HMRC has faced criticism for the types of cases it is pursuing, with the focus now seeming to be on lower complexity, and lower value cases, potentially to increase its success rate.

HMRC’s policy documents confirm it will pursue a criminal investigation in certain circumstances, such as where it feels it is necessary to send a strong deterrent message. This usually occurs in the following instances:

• Where there has been a breach of trust, such as by accountants, solicitors or other professionals;
• Where there has been deliberate concealment, deception, conspiracy or corruption;
• Where documents have been forged or intentionally destroyed; or 
• For repeat offenders.

Where a taxpayer under a COP9 investigation accepts the Contractual Disclosure Facility offer but makes materially, and intentionally, false or incomplete disclosures, HMRC will often feel it has no option but to criminally investigate. 

In addition, HMRC also reserves the right to reconsider the case as a criminal investigation where a taxpayer under a COP9 investigation rejects HMRC’s offer of the Contractual Disclosure Facility. This highlights the importance of utilising specialist advice in the event of a COP9 investigation.

Typically, HMRC will notify a taxpayer they are under criminal investigation by either inviting them to attend a Police Station for interview, or through the execution of a search and arrest operation (also known as a raid).