Elysium Law

HMRC

HMRC INVESTIGATIONS &
TRIBUNALS

 

What Is Tax Evasion?

Tax Fraud and Tax Evasion are very similar but tax evasion is a type of tax fraud which may lead to an investigation. Both involve misleading the tax authorities in order to pay less tax.

Avoiding Tax and HMRC Prosecutions

Whether you have committed tax evasion or have been unfairly accused by HMRC, you NEED to manage your approach carefully. It is a serious criminal offence that could land you in prison.

Criminal prosecution is being increased enormously due to the Revenue and Customs Prosecutions Office being incorporated with the Crown Prosecution Services. The Taxman is no longer interested in getting the money, they want prosecutions, the convictions AND the money.

In the event of prosecution, you will NOT escape paying the tax. You may be prosecuted under the Proceeds of Crime Act 2002 (P.O.C.A) or the Money Laundering Act 2007. If you are convicted of money laundering, all of your possessions – including your house, may be confiscated

If you are approached for tax evasion/fraud, seek advice from us now.

We have vast experience in criminal investigation from the initial stage of investigation up to and including representation in all courts up to the Crown court and Court of Appeal

Have you received a Criminal Investigation Section 144 Enquiry letter from HMRC?

HMRC will send out a letter inviting a taxpayer to attend a voluntary interview with HMRC under caution, you will be interviewed under PACE (Police and Criminal Evidence Act 1984).

You will be interviewed and cautioned by a HMRC Investigator who is experienced in dealing with these type of enquiries.

Do not be misled, these are serious and probing investigations which have started off with this seemingly innocent, friendly letter.

In the event of being interviewed, we will represent you and be with you at the interview.

Never agree to be interviewed alone. You will need full advice before entering the interview and we will determine any disclosure at that stage. We can then advise you more fully and whether it is in your interest to answer questions

Any comments you make at all will be used as evidence against you should HMRC think they have a sufficient evidence to prosecute.

Criminal Tax Investigations are serious.

If you receive a Criminal Investigation letter from HMRC call us at once. If you don’t, you could end up in prison!

 

What is a Contractual Disclosure Facility in the Code of Practice 9 process?

A Code of Practice 9 or COP 9 tax fraud investigation is undertaken if HMRC suspects serious tax fraud has taken place.

HMRC have recently changed the Code of Practice 9 – COP 9  process and introduced the Contractual Disclosure Facility, which now replaces the previous Civil Investigation of Fraud procedures.

Contractual Disclosure Facility and Code of Practice 9

This facility will be offered to taxpayers when HMRC suspect that a tax fraud has taken place. Those wishing to own up to potentially fraudulent activity may also take advantage of the Contractual Disclosure Facility – CDF1 form.

HMRC receive information from a number of different sources. They will, however, not tell you what information they hold or what suspicions they have. It is up to you to make a full disclosure to them.

You must remember that HMRC will not undertake a Code of Practice 9 investigation unless they have firm evidence that serious tax fraud has taken place.

.There are three options:-

  • The Contractual Disclosure Facility route: Owning up to tax fraud.

  • The Denial route: Denying any wrongdoing.

  • The Non-Cooperation route: ignoring HMRC’s letter and offer

If taxpayers suspected of tax fraud sign the document and own up to the tax fraud, HMRC will promise not to prosecute you.

The expiry date for accepting the offer and submitting the outline disclosure will be set out at the top of the Outline Disclosure form HMRC will send you. There will be no extension of time under any circumstances.

The outline disclosure should include the following details:-

  • The nature of the fraud;

  • How was it perpetrated

  • The involvement of others

  • The degree of your benefit

If you do not believe you have been involved in tax fraud, then you can sign and return the Contractual Disclosure Facility denial letter to HMRC. If HMRC verifies and accepts your denial, then they will issue confirmation they no longer suspect you.

If in any denial letter HMRC determine that your denial is untrue however, the letter will be used as evidence in any subsequent proceedings.

Please be advised, it is vital that you get an expert in dealing with HMRC tax investigations to deal with your case.

  • Do not telephone them.

  • Do not agree to meet with them alone

  • Do call us and we will advise you in the event that HMRC contact you.

HMRC Raids - The ‘Dawn Raid’- We Offer Advice and Training

HMRC generally execute raids having obtained search warrants from the appropriate court under section 9, Police and Criminal Evidence Act 1984 (PACE).-(see above and follow the link)

Under section 8, PACE, on an application by an HMRC officer, a Magistrate or Crown Court can issue a warrant permitting HMRC to enter and search named premises if they have reasonable grounds for believing that both:

  1. an indictable tax offence has been committed; and

  2. there is material on the specified premises that is likely to be

(i) of substantial value to the investigation of the offence; and,

(ii)  admissible at the trial for the offence.

There is no requirement that the occupier of the premises is under investigation. This means that innocent parties can be, raided, for example, the suspect’s accountant’s premises.

If ‘raided, what should you do?

Businesses should review their raids and procedures, in order to ensure that the correct procedures are in place if HMRC officers appear at their premises without warning. It is important that businesses are prepared and have in place a robust policy to ensure that, should HMRC unexpectedly arrive with a search warrant, they are in a position to manage the situation effectively. Remember the publicity alone can ruin your business even if HMRC’s suspicions are unfounded.

When a business premises is raided, an HMRC officer may seize and retain anything for which a search has been authorised under section 8, PACE. It is important that HMRC is monitored during the raid to ensure they are not seizing material that is outside the scope of the warrant. 

HMRC officers also have the power of arrest and often exercise this power. Once arrested, a person can be taken into custody for an interview ‘under caution’.

Legal privilege

HMRC is not permitted to examine or seize any material to which legal professional privilege attaches. In larger raids, HMRC officers are often accompanied by independent counsel whose role is to consider issues of privilege. There are, however, some difficult areas that may need to be addressed on the day of a raid, for example, the status of internal emails or communications with non-lawyer professional advisers, such as accountants and/or tax advisers. If there is a dispute over whether a document is subject to legal professional privilege, it should be separately bagged by HMRC in a ‘blue bag’ for later review with independent counsel.

Challenging an HMRC search warrant

It is important to remember that the legality of the decision granting and execution of a search warrant can be challenged by way of judicial review proceedings in the High Court.

In The Event of a Raid or to prepare for such eventualities. we offer experienced raid training courses and representation either by telephone or attendance.

 
 

FOR ADVICE ON APPEALS AND REPRESENTATION AT THE FIRST TIER TRIBUNAL PLEASE FOLLOW THE LINK BELOW