HMRC investigations and prosecutions

HMRC investigations and prosecutions

Our HMRC Investigations teams in Leeds, Sheffield and York are renowned for achieving positive results for our clients, and for reducing the negative impact of any unavoidable consequences.

To discuss your requirements please contact Jeremy Scott on 07971520407.

An HMRC investigation can be highly disruptive and potentially extremely damaging to your business and personal reputation. Early advice on strategy and a dynamic, pro-active approach are the best methods of achieving the optimal outcome in these cases.

We understand how an HMRC investigation works and can advise on the best response to protect you and your business. We also advise clients on business approaches before HMRC investigations, as prevention is better than cure. If you’re facing an investigation, we have the technical understanding and experience to support you every step of the way.

Prosecution by HMRC is serious and can result in criminal conviction. You need a legal team which can provide the best possible advice. We will ensure any involvement you have with HMRC is as stress-free and positive as possible, and, if prosecution is unavoidable, the impact on you and your business is minimal.

What can HMRC investigate?

HMRC has a broad remit. Investigations can be random, or based on a suspicion of fraudulent behaviour; they can relate to a particular aspect of your tax position, or be a full tax analysis of your entire operation. Whatever type of investigation is launched, you will receive a formal letter. If HMRC suspects fraud, the investigation letter will come from HMRC’s Fraud Investigation Service.

An HMRC investigation into suspected fraudulent behaviour could focus on:

  • Tax evasion
  • Avoidance of VAT payments on goods, or excise or customs duty
  • Not passing on VAT charges to HMRC – known as carousel fraud or missing trader intra community (MTIC) fraud.

It is important to get legal advice as quickly as possible whatever the circumstances, to ensure you comply fully and promptly to any requests, and so a robust and appropriate response can be organised.

What are the consequences of an HMRC investigation?

The first consequence of an HMRC investigation could be a request to attend an interview, or a dawn raid on your premises. If this occurs, you need expert legal advice. We are available 24 hours a day to support our clients and will attend interviews or searches to ensure you have the best guidance throughout.

If the investigation finds there is unpaid tax, this is usually resolved through a financial settlement. In cases of fraud, HMRC can impose substantial fines, seize assets to recover unpaid tax, and can launch criminal proceedings if it suspects wrongdoing related to:

  • tax evasion
  • money laundering under the Proceeds of Crime Act 2002
  • The Fraud Act 2006.

What is our goal when responding to an HMRC investigation?

Prior to an HMRC investigation:

The best way to deal with an HMRC investigation is to ensure one never takes place. We advise our clients on the organisation of their tax affairs, so they are in full compliance with complex and evolving tax laws. We are innovative and experienced, and design robust systems and processes which satisfy HMRC requirements.

Having up-to-date and compliant processes gives you peace of mind and ensures, should HMRC launch an investigation, you have nothing to worry about.

Following notification of an HMRC investigation:

Our goal once an HMRC investigation has been launched is to minimise the impact on you and your business. We will develop a response strategy and formulate the best available defence to avoid prosecution. Where conviction is unavoidable, our pro-active and meticulous approach will seek to minimise any penalties.

We support clients with civil investigations (including COP 8 and COP9 investigations), criminal investigations (including PACE interviews), applications for judicial review, applications before the First Tier and Upper Tax Tribunal, and proceedings in the Crown Court. Our dedicated and highly skilled lawyers have the experience you need, and the right contacts to pull together the relevant external experts to create the best possible team to mount your defence.

How does an HMRC investigation work?

The process usually starts before you are even aware of it. HMRC picks up red flags and potential issues with your tax affairs through human intelligence and sophisticated software analysis. The first time you become aware of the investigation will often be a set of questions, or a request for documentation. If this does not provide the required information, HMRC may visit your premises, or require you to attend an HMRC office.

Investigations usually start with a narrow focus, often a single year and a specific area of your tax liability. This scope may be extended to other areas, and up to 6 years if bad accounting is suspected, and up to 20 years if there is a suspicion of tax evasion.

Expert advice is necessary when the HMRC seek to expand the scope of an investigation. We understand how these investigations work, and know how and when to push back against unnecessary requests (which may be invalid fishing expeditions) and when to comply.

The duration of the investigation varies but will generally be a few months. In routine investigations, HMRC are simply carrying out a check of your processes and history. Full compliance will usually mean the investigation is brief and non-disruptive.

Whatever the nature of the investigation, we will lead the response, allowing you to remain focused on your commercial operation.

What is the best approach to an HMRC investigation?

 You should always comply fully and promptly with requests from HMRC. It is also important to not do anything which could put you in a worse position. We will guide you through the process from the very start, ensuring your responses are appropriate.

Never attempt to conceal information or destroy evidence which is relevant to a tax investigation. We will advise you on the best way to present your tax history and affairs to HMRC.

Withholding information will simply drag out the process and is likely to result in a harsher penalty. If it is not possible to avoid prosecution, our strategic advice will help to minimise the consequences for you and your business.

How can the consequences of an HMRC investigation be minimised?

The response you give to the investigation can have a significant bearing on the outcome. We have a deep understanding of the way HMRC work and what is required to satisfy tax investigations. In these situations, you need the best – there are no prizes for second place.

Every case is different, but possible defences which can be considered include:

  • no offence took place
  • no deliberate attempt to defraud HMRC took place
  • full compliance with the investigation, with no attempt to hide wrongdoing.

We will attend all meetings with HMRC (whether in person or over the phone), and review all documentation submitted to the investigation. Our team quickly analyse and understand the circumstances you find yourself in and will act pro-actively and decisively to design the best possible response.

What is the difference between a COP 8 and a COP 9 investigation?

A COP 8 investigation can be launched if HMRC believes you have not paid enough tax. This could be through a tax avoidance scheme, or for some other reason. The purpose of the investigation is to recover the unpaid tax, plus interest and, potentially, other penalties.

A COP 9 investigation can be started where HMRC suspects fraud or dishonesty. Criminal investigations are reserved for serious offences where HMRC ‘needs to send a strong deterrent message’.

You have two options if you receive notification that you are subject to a COP 9 investigation. You can accept fraud has taken place and fully disclose your actions in a Contractual Disclosure Facility. Or you can deny any wrongdoing has taken place. HMRC can launch a criminal investigation if fraud is denied, or it believes full disclosure has not taken place.

Early advice is vital if you are notified of either type of civil investigation. We will take the lead in responding appropriately and minimising the consequences for you and your business.

Why choose Lupton Fawcett?

The impact of an HMRC investigations can be devastating, both in terms of the impact on your commercial operation and on your reputation. Our team is renowned for achieving positive results for our clients, and for reducing the negative impact of any unavoidable consequences.

We have over 30 years’ experience dealing with HMRC, experience we can draw upon to provide dynamic, pro-active advice which is practical and communicated in jargon-free plain English. We are proud of our reputation for working tirelessly for our clients, and for our dedication to your cause. In your hour of need, we will be by your side.

Contact us

Lupton Fawcett’s team of Business and Financial Crime Solicitors are highly regarded for successfully defending businesses and individuals facing investigation or prosecution for all types of fraud offences.

If you are facing an HMRC investigation we can provide comprehensive support, specialist legal advice, and skilful representation.

Our team is led by Jeremy Scott who has 25 years’ experience of defending clients across the full spectrum of corporate and financial crime cases so you can rest assured that whatever the circumstance are, we’ll be able to help find the optimal outcome.

At such a critical time for the reputation and future of you and your business, it is imperative that you choose the right lawyers to advise and represent you. Lupton Fawcett, ranked in The Legal 500 for Regulatory Law, is known for winning cases that other firms would lose.

Part of a nationally recognised full-service law firm, we are able to assemble a multi-disciplinary team to support you through a criminal regulatory investigation or prosecution with the utmost care.

We also understand that business has to continue as, so our approach is always highly commercial, putting business continuity at the heart of our advice and representation whenever possible.

Within every area of law, we put your interests first.

Our HMRC Tax Investigation Defence Lawyers act regularly for corporate clients across England and Wales including Bradford, Birmingham, Hull, Leeds, Liverpool, London, Manchester, Sheffield, York, and Nottingham.

We can support your needs wherever you live in England or Wales.

We will always respond promptly, and we will be happy to help.

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