Definition of Serious Fraud

 

There is no statutory definition of serious fraud. The only reference to ‘serious fraud’ in the tax legislation is contained in TMA 1970 s. 20C (1A):

 

’20C (1A)  Without prejudice to the generality of the concept of serious fraud –

 

    • Any offence which involves fraud is, for the purposes of this section, an offence involving serious fraud if its commission had led, or is intended or likely to lead, either to substantial financial gain to any person or to serious prejudice to the proper assessment or collection of tax and

 

    • An offence which if considered alone would not be regarded as involving serious fraud may nevertheless be so regarded if there is reasonable ground for suspecting that it forms part of a course of conduct which is, or but for its detection would be, likely to result in serious prejudice to the proper assessment or collection of tax.’

 

 

HMRC’s view of fraud is outlined in its instructions to inspectors:-

 

‘Fraud (in relation to the Revenue) includes, in its various forms, falsification with an intention to deceive and this may be present even as a mere conscious understatement in, or omission from, a return or accounts.

 

Thus, the active intention to deceive may, on the other hand, be so slight that the falsification differs little from that resulting from carelessness or negligence. On the other hand, falsification may be deliberately planned with the clear intention of deceiving and cheating the Revenue by, for example, the omission, manipulation or invention of figures, or other records.’

 

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