HMRC Tax Investigations and Prosecutions

“Committed to handling legal aid funded and privately funded matters in the financial crime space. Regularly instructed in high-level investigations led by the SFO, HMRC and the FCA. Recent mandates include advising on allegations of bribery and tax fraud”

Chambers UK & Partners 2018

HMRC Tax Investigations and Prosecutions

At Hodge Jones and Allen we have enormous experience in dealing with a huge variety of investigations and prosecutions by HM Revenue and Customs (HMRC). HMRC is the UK’s tax, payments and customs authority and investigates wrong-doing with respect to taxation. Its remit for investigating fraud is extremely wide. Individuals and companies can find themselves on the wrong end of investigations into fraud relating to direct and indirect taxation.

The subject of investigation can involve suggestions of highly sophisticated criminality. Conspiracies may be alleged involving systematic fraud and misrepresentation, for instance in the form of Missing Trader Intra- Community (MTIC) fraud and carousal/diversion fraud. HMRC may be involved in complex investigations with other authorities including the Serious Fraud Office (SFO) and the National Crime Agency (NCA).

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We provide advice and representations in connection with all stages of HMRC action:

  • Civil investigations including COP 8 / COP 9 investigations
  • Interviews in connection with criminal investigations including PACE interviews
  • Defending applications before the First Tier and Upper Tax Tribunal
  • Making linked judicial review applications and any connected interim relief applications
  • Defending  proceedings in front of the Crown Court and linked appeals against conviction and/ or sentence

If you receive any correspondence from HMRC then we are on hand to assist and advise you as to how to deal with it. It is vital that the correct approach is taken at the outset to avoid a matter being elevated to a criminal investigation and prosecution. If a matter proceeds to a criminal investigation then we are very focused on trying to ensure no criminal proceedings ensue, either through persuading HMRC to take no further action or settling a dispute by way of civil process.

It is important to keep in mind that if HMRC suspects wrong doing, there are options other than criminal investigation and prosecution. It is important that you instruct lawyers who are aware of this and can navigate the process and manage HMRC properly – always seeking to secure the best possible result.

Why Hodge Jones & Allen Solicitors?

We are recognised in Chambers for our work defending matters taken by HMRC. We can advise you at the very earliest stage – even before any approach from HMRC. We can expertly advise on existing investigations and robustly defend prosecutions. We are highly skilled in advising you in circumstances outside criminal proceedings.

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HJA Lawyers are experts when it comes to tax trials. Our Financial Crime and Regulatory Team has huge depth and breadth of experience when it comes to defending fraud. We have been involved in many of the largest, most complex and highest profile fraud cases coming before the criminal courts. In addition to being able to advise and ably intervene from the earliest stages of HMRC’s investigation, we can robustly and expertly defend your case should it come to trial – assembling the best team of experts, counsel and solicitors to defend your position.

Frequently Asked Questions

Frequently asked questions

I understand I am subject to a COP 8 investigation. What does this mean?

If HMRC forms the view that insufficient tax is being paid by an individual or a business – either through a tax avoidance scheme or in some other manner – it may start a Code of Practice (COP) 8 investigation.

Through opening such a tax investigation, HMRC hope to recover the lost tax – as well as interest and possible additional penalties. Anyone facing such a tax investigation should seek the advice of one of our experienced, driven lawyers well used to the approach taken by the HMRC and well placed to intervene in these proceedings. Careful consideration should be given to any finding and penalty imposed. Challenge can be made and representations presented as to the appropriate way to proceed.

What will HMRC do if fraud or dishonesty is suspected – will there be a criminal investigation?

If fraud or dishonesty is suspected, HMRC may start a Code of Practice (COP) 9 investigation, rather than launching straight into a criminal investigation. HMRC states that criminal investigation should be reserved for cases where it “needs to send a strong deterrent message or where the conduct involved is such that only a criminal sanction is appropriate”.

I have received a COP 9 Notice – what is this and what should I do?

The COP 9 procedure can be used by HMRC when tax fraud or dishonesty is suspected. The tax in question could be, for instance, income tax, inheritance tax, capital gains tax or corporation tax. If you are made subject to a COP 9 investigation you will be able to choose between two different options.

The first option is to accept that tax fraud has been committed and that loss has been caused to HMRC because of your conduct. You can then enter into a Contractual Disclosure Facility (CDF). This option involves fully disclosing the extent and the form of the tax fraud within a tight timeframe. The other option provided by the COP 9 procedure is to deny any wrong doing at all, and reject the offer of complying with the Contractual Disclosure Facility.

These are the only two choices. There is no option to cooperate whilst continuing to deny wrong doing.

It is vital that expert advice is sought as soon as the notice is received of the COP 9 investigation. If HMRC is satisfied that full disclosure has been made in relation to tax fraud, then it will not commence a criminal investigation. If tax fraud is denied – or the disclosure provided is not considered to be full and frank – then a criminal investigation can commence and ultimately, prosecution.

Although it will no doubt be concerning to receive a COP 9 Notice, it should be remembered that it does offer the possibility of coming out the process without any criminal sanction.

I think that I may have done something wrong and really want to avoid prosecution. What can I do?

At HJA we understand that for many people avoiding prosecution b is the absolute priority. We also understand that this process must be approached cautiously and carefully. This requires a mixture of strong analysis of your position, a clear understanding of HMRC’s working methods and excellent negotiation skills. Our lawyers are experts in both COP 8 and COP 9 investigations.

We are well-versed in considering methods that can be used to avoid criminal investigation or prosecution. We can help you to assess the most suitable approach taking account of your particular circumstances. We have the skills and experience to help you to navigate this tricky process and will seek the lowest possible penalties on your behalf.

What if my home or my business have been subject to a Dawn Raid?

The first you may know about an investigation is when HMRC carry out a dawn raid. HMRC has the power to enter and search premises if tax fraud is suspected. If this occurs you should obtain a copy of the search authority and seek immediate legal advice. We can attend the search if necessary and explore whether the search warrant can be withdrawn. We have expert solicitors on call 24 hours a day who will be able to assist you.

What charges can follow an HMRC investigation?

There are a range of circumstances when HMRC may decide the only approach they can take is to start a criminal investigation and prosecution. HMRC prosecute all sorts of cases, from those suspected of involvement in organised crime gangs and systematic, sophisticated conspiracy to cases involving corruption and matters involving money laundering. It is open to HMRC to prosecute individuals and companies for a variety of offences including;

  • Tax Evasion
  • Money Laundering under the Proceeds of Crime Act 2002
  • Fraud allegations under the Fraud Act 2006


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