Criminal Investigation of Fraud It is HMRC policy to deal with Tax Evasion and Fraud by use of the Civil Investigation of Fraud procedures. HMRC have complete discretion to conduct a Criminal Investigation, they usually do this where they feel they need to send a 'strong deterrent message' or where they feel the case is so serious, that only a criminal sanction is appropriate.
Where a taxpayer is investigated using the Civil Investigation of Fraud Procedures, but makes materially false disclosures, then HMRC will often feel that they have no alternative than to prosecute.
HMRC has published its prosecution policy and it stated that it will generally consider Criminal, rather than Civil action in the following Situations:-
Materially false statements are made or materially false documents are provided in the course of a Civil Investigation. Deliberate concealment, deception, conspiracy or corruption is suspected. Using false or forged documents. Previous tax evasion offences or there is a repeated course of unlawful conduct or a previous Civil Investigation. People in positions of trust or responsibility. Reliance is placed on false or altered documents or material facts are misrepresented to enhance the creditability of a Tax Avoidance Scheme. Systematic frauds where the tax evaded represents a serious threat to the tax base, including conspiracy.
