When HMRC Initiates Criminal Investigations
HM Revenue &Customs (HMRC) may launch a criminal investigation when there are suspicions of tax evasion or fraud by businesses or individuals. Such investigations are particularly serious and may stem from findings during civil investigations that suggest criminal behaviour.
Criteria for HMRC Criminal Investigations
HMRC opts for criminal investigations when a criminal sanction is deemed the only appropriate response. Whilst HMRC will investigate HMRC related offences (such as tax evasion), any decision to prosecute will be made by the Crown Prosecution Service. Investigations can arise from various suspicions, including:
- Tax fraud or evasion
- Corruption or concealment of financial information
- Submission of false financial statements or fraudulent documentation
- Money laundering activities
- Cheating the public revenue
- Evading customs duties
- Implications and penalties of HMRC Investigations
HMRC investigations carry severe penalties. While civil investigations can lead to hefty financial penalties, criminal investigations may result in imprisonment and confiscation proceedings. Therefore, securing expert legal representation early in the process is crucial.
The Process of an HMRC Criminal Investigation
During an investigation, HMRC typically requests various records, including invoices, VAT, corporation tax records, bank statements, and correspondence. In certain cases, they might obtain seizure warrants to confiscate items like computers and mobile phones.
HMRC's powers extend to obtaining court orders for financial records from banks and advisors, and they can also seek orders to restrict dealings with assets, including imposing Account Freezing Orders.
Importance of Representation in HMRC Interviews
A critical early stage in an HMRC investigation is the interview process. Being represented during these interviews and throughout the investigation process is vital. Decisions made early on can significantly impact the investigation's direction.
