Civil Investigation Of Fraud (code Of Practice 9): Time For A Review Of The Process

HMRC gives a guarantee of non prosecution in return for a disclosure under the Civil Investigation of Fraud procedures. This, it is difficult for HMRC to commence prosecution proceedings once the guarantee of non prosecution has been given. Unfortunately it is HMRCs view that it is all too easy for organised criminals who are evading tax to gain immunity from prosecution and we understand that in these cases once immunity is obtained the individual fails to make a full disclosure or pay the tax due. Thus in some instances HMRC wish to in some way keep the best bits of the civil investigation of fraud procedures but retain a right to prosecute people who refuse to cooperate.

As a result it is believed that HMRC may seek to alter its procedures in the civil investigation of fraud so that the vast majority of people that fall within the Civil Investigation of Fraud procedures are, as now, guaranteed non prosecution in return for a full disclosure but to allow HMRC to prosecute those cases involving non disclosure or partial disclosure.

HMRC does already have the option of mounting a prosecution without offering the Civil Investigation Procedure but it seems that in most potential cases they are unable, or do not wish, to gather sufficient evidence to bring a successful prosecution. This is probably because prosecutions are very costly in terms of man power and only a small number are needed to act as a deterrent to tax fraud. The civil investigation of fraud procedures are however very lucrative as HMRC do little work due to the fact that the person who has protection from prosecution generally agrees to commission a report outlining the extent of the tax evasion as appropriate in the civil investigation of fraud procedures.

One option HMRC may consider is inviting the person subject to a tax investigation (whether using the civil investigation of fraud procedures or not) to enter into a contract to disclose the irregularities which if broken could allow HMRC to begin prosecution proceedings. This would seem to be a sensible approach given the issues HMRC face on what they believe is an abuse of the civil investigation of fraud procedures.

Gilbert Tax Will deal with HMRC for you

For most people, the simple thought of having to deal with an Inland Revenue Investigation is so terrifying that they avoid the issue altogether and often find themselves in even greater tax difficulties. There is no need to let problems large or small with the HMRC escalate to the point where your quality of life and happiness suffer.

At Gilbert Tax, we have over eighty years experience in finding closure for clients dealing with Inland Revenue investigation and significant experience in dealing with the tax evasion issues. We are also skilled in negotiating with HMRC, relative to tax evasion, so as to avoid or limit financial penalties for the individuals or businesses who find themselves subject to a tax investigation.