CRIMINAL INVESTIGATIONS

A Criminal Investigation is undertaken by HMRC where they suspect serious tax fraud has occurred and wish to recover the tax via prosecution rather than on a civil basis via the Code of Practice 8 (COP8) or the Code of Practice 9 (COP9).

If a case is treated criminally rather than civilly, the burden of proof shifts from the defendant to the prosecution.  This means that you are not considered guilty of the tax fraud unless HMRC can prove it. This is different to cases which are dealt with civilly, where the starting point is that any deposits are considered taxable unless you can prove otherwise.

If HMRC are bringing criminal proceedings against you or your client, it therefore means that they consider they have irrefutable proof that the fraud has occurred.

HMRC may also be proceedings on a criminal basis due to deemed lack of co-operation with the COP9 process, or simply because they have identified something fraudulent via a COP8 enquiry.

Regardless of the reason, if you or your client have received a letter from HMRC stating that they are commencing criminal proceedings (or you think that they may do soon), it is vital that you act immediately to protect yourself.

We would strongly suggest speaking to a professional who can advise on any tax matters and, if appropriate, work alongside a defence lawyer to ensure that you are roundly protected.

Expert advice at the earliest possible time will best ensure that HMRC do not obtain further information they are not entitled to, that you adhere to all relevant deadlines and that any opportunities to get the case treated on a civil basis are properly explored.

Why have I received this letter?

Before commencing criminal proceedings, HMRC will have undertaken substantial work to verify the data that they hold. HMRC believe that there has been an underpayment of tax and that this underpayment would have been deliberate and fraudulently manufactured.

As tax evasion is a criminal offence, Cheating the Public Revenue carries a maximum prison sentence of life.  The information held would therefore have been reviewed by HMRC’s Criminal Investigation team.

HOW CAN LANCASTER KNOX HELP?

At Lancaster Knox our Tax Investigation specialists are industry recognised and dealt with several Criminal Investigations over the years.  This is a highly specialist area with significant non-financial risks to the client so it is vital that a specialist is involved.

Lancaster Knox will work with you and your current adviser to ensure that the process is managed correctly and timely, that any opportunities to get the case treated civilly are explored, that the correct specialists are introduced to you at the correct times, that the correct amount of tax is paid and that your interests are best protected.