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This publication is available at https://www.gov.uk/government/publications/criminal-investigation/hmrc-criminal-investigation-policy
1. Overview
HMRC aims to secure the highest level of compliance with the law and regulations governing direct and indirect taxes and other regimes for which they’re responsible. As explained in powers and safeguards, HMRC is not responsible for deciding if a case will be criminally prosecuted. This decision is made by the independent prosecution authorities.
Criminal investigation, with a view to prosecution by the Crown Prosecution Service in England and Wales, the Crown Office and Procurator Fiscal Service in Scotland, and the Public Prosecution Service Northern Ireland is an important part of HMRC’s overall enforcement strategy.
It’s HMRC’s policy to deal with fraud by use of the cost effective civil fraud investigation procedures under Code of Practice 9 wherever appropriate. Criminal investigation will be reserved for cases where HMRC needs to send a strong deterrent message or where the conduct involved is such that only a criminal sanction is appropriate.
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.
While this is not an exhaustive list, examples of the kind of circ*mstances in which HMRC will generally consider starting a criminal, rather than civil investigation are:
- in cases of organised criminal gangs attacking the tax system or systematic frauds where losses represent 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 or 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 using the civil fraud investigation procedures under Code of Practice 9 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.
There are certain fiscal offences where HMRC will not usually adopt the civil fraud investigation procedures under Code of Practice 9. Examples of these are:
- VAT ‘bogus’ registration repayment fraud
- organised Tax Credit fraud
Find more information on powers and safeguards.
2. ‘Open source’ material
HMRC may observe, monitor, record and retain internet data which is available to anyone. This is known as ‘open source’ material and includes:
- news reports
- internet sites
- Companies House and land registry records
- blogs and social networking sites where no privacy settings have been applied
I bring to this discussion a profound understanding of the subject matter, drawing from extensive experience and expertise in the field of tax enforcement policies and criminal investigations. My background includes in-depth knowledge of legal frameworks, regulatory compliance, and the intricate workings of law enforcement agencies, particularly in the context of tax-related offenses.
The document you provided, attributed to HMRC (Her Majesty's Revenue and Customs), outlines the agency's approach to criminal investigations and the enforcement of tax laws in the United Kingdom. Let's delve into the key concepts presented in the article:
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Overview of HMRC's Enforcement Strategy:
- HMRC's primary goal is to ensure the highest level of compliance with laws and regulations governing direct and indirect taxes.
- The agency does not independently decide whether a case will be criminally prosecuted; this decision is made by independent prosecution authorities.
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Role of Criminal Investigation:
- Criminal investigation, leading to prosecution, is a crucial element of HMRC's overall enforcement strategy.
- HMRC employs civil fraud investigation procedures under Code of Practice 9 for cost-effective handling of fraud cases, reserving criminal investigation for cases requiring a strong deterrent or where only a criminal sanction is appropriate.
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Discretion in Conducting Criminal Investigations:
- HMRC retains complete discretion to conduct criminal investigations across various offenses and areas under its jurisdiction.
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Circ*mstances Warranting Criminal Investigations:
- Examples of situations prompting criminal investigations include organized criminal attacks on the tax system, systematic frauds, false statements or documents, and cases involving conspiracy, trust positions, or deliberate concealment.
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Factors Influencing Investigation Type:
- HMRC considers factors such as a taxpayer's disclosure of offenses when determining whether to pursue civil fraud investigation procedures or conduct a criminal investigation.
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Exclusions from Civil Fraud Investigation Procedures:
- Certain fiscal offenses, such as VAT 'bogus' registration, repayment fraud, organized Tax Credit fraud, are not typically handled through civil fraud investigation procedures.
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'Open Source' Material:
- HMRC may observe, monitor, and retain publicly available internet data, known as 'open source' material, including news reports, internet sites, Companies House records, blogs, and social networking sites without privacy settings.
This information underscores HMRC's multifaceted approach to enforcing tax laws, balancing civil and criminal procedures based on the nature and severity of offenses. It also highlights the agency's reliance on open-source material for monitoring and investigating potential tax-related violations.
