What to do if you’re being investigated for tax fraud

What to do if you’re being investigated for tax fraud

If you’re being investigated for tax fraud, it’s extremely important to speak to an experienced tax fraud solicitor as soon as you become aware HMRC are looking into your tax affairs.

Tax fraud and tax evasion are considered serious crimes and have potentially severe penalties for those who are found guilty. No two cases are ever the same in what can be a complicated area of the law to navigate. However, the good news is that the tax fraud lawyers at Purcell Parker can guide you through every aspect of being investigated for tax fraud or tax evasion.

Due to the billions lost to the UK in undeclared income each year, HMRC investigators are proactive in uncovering discrepancies in tax returns. Not only that, they are now supported in their efforts by Connect, a £100m supercomputer designed to tackle fraud by using personal data from various sources to compare with the information given in tax returns.

Tax fraud solicitors in Birmingham city centre

Our location opposite the Magistrates’ Court in central Birmingham means we are ideally placed for professionals who need to meet us regarding their case during the working day. However, we understand that discussing the details of a tax fraud investigation is a stressful process, particularly for the majority of our clients who find themselves in this position never having been on the wrong side of the law before. With this in mind, we may be able to meet you at a time and place of your choosing to discuss your case. Although we are based in Birmingham, we are able to extend our service throughout and beyond the West Midlands, including London, and have previously represented client in matters before Southwark Crown Court.

Whether a discrepancy in your tax affairs is a result of an error on your part, a mistake by HMRC or a failure to properly comply with your tax responsibilities, our team can advise on the best course of action in order to reach a best case scenario resolution for your case. In order to do this, it’s vital to bring all relevant paperwork you have in your possession to our first meeting.

Paying for your tax fraud case

Legal Aid may not be available, depending on your circumstances. However, we will always consider it for you.

In order to help you budget at a stressful time when you may be facing serious financial consequences including fines and the potential loss of your job, we may be able to provide you with a fixed-fee quote or best estimate as to costs once the circumstances of your case are established.

In any event, your first consultation with the tax fraud solicitors at Purcell Parker will always be on a free, no-obligation basis.

What’s the process of being investigated for tax fraud?

The exact procedure will depend on what you have been accused of and the seriousness of the alleged offence. Tax fraud and tax evasion investigations are conducted by HMRC. Only the most serious cases take the form of a criminal investigation, however you should be under no illusion that civil proceedings against you by HMRC are not a serious matter just because the police are not involved.

The process will usually begin with a letter asking for more information about the matter HMRC has identified as requiring investigation. It’s very natural to panic when a letter like this arrives. However, before you respond, it’s essential to remain as calm as possible and seek the advice of an experienced tax fraud lawyer.

What will my tax fraud solicitor do next?

The first step will be for you to sign HMRC’s 64-8 form which gives your permission for HMRC to discuss your case with us. We will then contact HMRC on your behalf to ask why they believe you owe tax, keeping you up to date at all points of what is usually approximately a 21-day process. When this process is complete, we will be able to agree on a strategy for resolving the matter with HMRC in full compliance with their procedures in order to avoid any unnecessary delays or penalties.

What happens if a criminal investigation is launched against me?

If HMRC have decided that they have grounds for a criminal investigation against you, for example where they believe long-term tax evasion or organised VAT fraud has taken place, the first you may hear of it is when you receive a request for a voluntary interview under caution or, in more serious cases, you are arrested. Clearly, this is an incredibly stressful turn of events and one that you should not attempt to navigate without first taking the expert advice of an experienced solicitor.

Again, the tax fraud lawyers at Purcell Parker will advise you on every aspect of your dealings with HMRC, from dealing with their correspondence and requests to representing you at interviews and meetings and if necessary, in tribunals or court hearings.

What should I do if I’m arrested or asked to go to a voluntary interview under caution?

If you are placed under arrest in Birmingham or locations including Coventry, Warwick, Worcester, Leamington Spa, Stafford and Wolverhampton, you should inform the police officer that you wish to speak to one of the 24-hour team from Purcell Parker. Everyone, regardless of their circumstances has the right to free legal aid representation at the police station when they are arrested.

If you have been invited to attend a voluntary interview under caution, it’s vital to take the necessary time and effort to thoroughly prepare your case with your defence solicitor. Your lawyer will advise on whether you should co-operate with this request, although it is worth noting, it’s almost always advisable to do so.

The fact that you are not under arrest at a voluntary interview under caution is an advantage as it means you have time to prepare. However, it is a mistake to be complacent; the fact that you are placed under caution means that anything you say in this recorded interview can be used against you, should the authorities decide there are grounds for taking a tax fraud investigation against you further.

Is a fine or imprisonment inevitable if I’m found guilty of tax fraud?

Not necessarily. In certain circumstances our tax fraud solicitors may be able to argue for, and successfully secure, an outcome for your case that does not involve a criminal punishment. In the civil procedure known as a COP9 investigation, it may be possible for you to avoid fines or a prison sentence in exchange for full disclosure about the fraudulent activities you have been involved in. Of course, in this scenario you will also be required to repay all outstanding tax including interest and any relevant penalties relating to the irregularities in your affairs. If this an option in your case, we will be able to advise you on any voluntary tax disclosures that could lead to a COP9 investigation as an alternative to criminal charges.

Could I go to prison if I’m found guilty of tax fraud?

Yes. In the most serious cases of tax fraud or tax evasion, the maximum sentence that can be imposed by the Crown Court is seven years and an unlimited fine. Most tax-related cases that go to trial are heard in the Magistrates’ Court where the maximum sentence for tax evasion is a fine of £5000 or six months in prison. The maximum sentence for providing false documentation to HMRC is a fine of up to £20,000 or six months in prison.

How do fines for tax fraud work?

HMRC fines are categorised as follows:

  • Failure to take reasonable care: failing to meet your responsibilities by neglecting to declare part of your income or missing out part of your tax return that should be completed can result in a penalty of up to 30% of the tax due.
  • Deliberate understatement: knowingly overstating expenses or allowances or understating income to HMRC in your tax return can result in a penalty of up to 70%.
  • Not declaring income and hiding the evidence: fines of 200% can apply to those who destroy documents, falsify invoices or contracts or hide undeclared income in a secret bank account.
  • Failure to disclose a tax avoidance scheme: penalties for not declaring involvement in a tax avoidance scheme can be up to £600, with fines of up to £1 million possible in the most serious cases.

Experienced tax fraud lawyers on your side

If you are being investigated for tax fraud, find out more about how the team at Purcell Parker can help by calling 0121 236 9781 or filling in our contact form.