Criminal investigation

HMRC investigates crime involving all of the taxes and other regimes for which it is responsible. However, the decision whether to bring a criminal prosecution is made by an independent prosecuting authority. In England and Wales this is the Crown Prosecution Service (‘CPS’). In Northern Ireland it is the Public Prosecution Service for Northern Ireland and in Scotland it is the Crown Office and Procurator Fiscal Service. HMRC’s principal criminal powers are contained in the Police and Criminal Evidence Act 1984 (‘PACE’) and the Serious Organised Crime and Police Act 2005 (‘SOCPA’). These powers apply generally to all UK taxes.

Examples of the kind of circumstances in which HMRC will generally consider commencing a criminal, rather than civil investigations are:

  • In cases of organised criminal gangs attacking the tax system or systematic frauds where losses represents a serious threat to the tax base, 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, pursuing an avoidance scheme, reliance is placed on a false or altered document or such reliance or material facts are misrepresented to enhance the credibility of a scheme;
  • 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 with particular focus on advisors, accountants, solicitors and others acting in a ‘professional’ capacity who provide the means to put tainted money out of reach of law enforcement;
  • 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.

Under the Police and Criminal Evidence Act, HMRC may enter and search premises and seize items such as computers. Very often, the first a taxpayer will know of a criminal investigation is the arrival of HMRC investigators, armed with search warrants, at his or her personal and business premises. The taxpayer may then be arrested and searched by the investigators, who will conduct the most thorough search of the premises and seize computers and documents. It is absolutely essential that any taxpayer, faced with such a situation, should obtain skilled legal advice immediately.

Levy & Levy have immense experience of HMRC criminal investigations and can protect their clients during the search and seizure operation and any subsequent HMRC interview under caution. A criminal investigation is the most stressful experience that a taxpayer can undergo and we never forget that our role is as much about helping our clients through this most difficult of times as it is about the legal issues involved.