Indications of Serious Fraud

 

Features considered by HMRC as indicating serious fraud (especially where there is a combination of such features) and which must be submitted to Special Civil Investigations (SCI) as soon as the feature (s) is recognised are:-

 

    • False accounts have been deliberately drawn up and submitted to HMRC for the purposes of evading tax

 

    • Documents used to prepare accounts or returns have been forged or other wise materially altered or falsified with intent to deceive

 

    • There has been collusion between the taxpayer and others to defraud HMRC

 

    • An accountant, solicitor or other tax adviser is suspected of acting dishonestly in his own affairs or those of his clients

 

    • The taxpayer has been the subject of an earlier investigation and his statement of assets and/or certificate of disclosure has subsequently been discovered to be a false in a material particular

 

    • The taxpayer has been the subject of an earlier investigation and subsequent to the conclusion of that investigation he becomes involved in further irregularities

 

    • The taxpayer has a special status in the administration of justice or tax, e.g. government ministers, judges, magistrates and tax commissioners, or is a member of either House of Parliament

 

    • There is suspected evasion using the vehicle of an offshore company involving false invoices or monies diverted offshore

 

    • An informer appears to have valuable information about a suspected fraud or substantial evasion, whether or not he is seeking a reward

 

    • Cases of phoenixism

 

    • Cases of failure to notify chargeability or very late filing and

 

    • Cases of serious PAYE irregularities

 

 

 

 

However, the presence of one or more of these indications does not meant hat serious fraud must have occurred, nor does it mean that the case will inevitably be worked by SCI; each case is considered on its merits. Furthermore, the involvement of SCI in a case does not always mean that serious fraud is suspected, since SCI also carry out other types of investigation. It is therefore important that the adviser establishes which SCI group is acting in the case.

 

SCI also has responsibility for receiving and passing on information exchanged with other Revenue authorities throughout the world. Information exchanged in this way has led to the recovery of millions of pounds which would otherwise have escaped taxation; a source of information that continues to grow in importance. However, it should be noted that SCI is not concerned with investigating tax avoidance across national borders by multi-national companies; this is the province of International Division.

 

SCI will also investigate non-accounts cases where false returns or statements have been made and substantial amounts of tax are involved.

 

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