If you are being investigated for, or charged with, tax fraud, our tax fraud solicitors are here to help.
Whose responsibility is it to investigate tax fraud?
HM Revenue & Customs (HMRC) has responsibility for investigating crimes relating to tax, including: direct and indirect tax evasion, excise duty fraud and tax credit fraud.
What is the Specialist Fraud Division (SFD)?
This is a dedicated fraud prosecuting team within the Crown Prosecution Service (CPS). It can investigate fraud-related crimes throughout England and Wales, in collaboration with other agencies. It works on the most serious, complex and difficult fraud cases and liaises with the National Crime Agency (NCA), the Economic Crime Command (ECC) and police fraud units across the country. The SFD also prosecutes all cases of criminal tax, excise and strategic export which are subject to criminal investigations by the HMRC in England and Wales.
Under which sections of the Fraud Act 2006 could a person be prosecuted for tax fraud?
Whilst section 1 of the Act sets out the general offence of fraud, sections 2, 3 and 4 detail different ways in which fraud can be committed.
On this page, sections 2 and 3 will be looked at in detail, as they are most relevant to the offence of tax fraud.
What is ‘Fraud by False Representation’ (section 2)?
This offence, which is entirely focused on the behaviour of the individual, takes place when a person:
- made a false representation
- knowing that the representation was or might be untrue or misleading
- with intent to make a gain for himself or another, to cause loss to another or to expose another to risk of loss.
What is ‘Fraud by Failing to Disclose Information’ (section 3)?
This offence, which again is entirely focused on the behaviour of the individual, takes place when a person:
- failed to disclose information to another person
- when he was under a legal duty to disclose that information
- dishonestly intending, by that failure, to make a gain or cause a loss.
The offence is complete as soon as a person fails to disclose information, provided they were under a legal duty to do so, and that it was done with dishonest intentions.
The following factors are of importance when the charge is being drafted:
- the prosecution assertion that there was a legal duty to disclose information;
- the precise relationship that gave rise to that duty;
- the information that it is alleged that the defendant failed to disclose;
Note: terms such as ‘false’, ‘representation’, ‘dishonestly’, ‘gain’ and ‘loss’ have a legal definition and are defined within the Act.
What other legislation covers tax fraud?
There are many other legislative recourses available to those making charging decisions, as follows:
Fraud – Conspiracy to defraud (common law)
False accounting – Theft Act 1968 (section 17)
Fraudulent evasion of VAT; False statement for VAT purposes; Conduct amounting to an offence – Value Added Tax Act 1994 (section 72)
Fraudulent evasion of income tax – Taxes Management Act 1970 (section 106A)
Fraudulent evasion of excise duty; Improper importation of goods – Customs and Excise Management Act 1979 (sections 50, 170 and 170B)
Fraud – Cheat the public revenue (common law)
Our tax fraud solicitors are specialists in all types of fraud.
What factors are taken into account when sentencing?
In order to determine the offence category, the court should assess the culpability (the offender’s role in committing the offence) and harm (gain/loss caused, or intended).
Which sentences are available if a person is convicted of tax fraud?
As the list above indicates, there are many possible fraud offences and each has different sentencing options.
In general terms, the penalties include a fine, community order and custodial sentence – and for some offences, a lengthy custodial sentence is referred to within the sentencing guidelines. It is therefore vital that you consult tax fraud solicitors as soon as possible.