Tax Evasion | HMRC Powers

When you filed your self-assessment tax returns, you probably thought that you were done with your dealings with HMRC for another year. However, if you have received a letter from the tax office notifying you of a problem, then you may be wondering exactly what HMRC can do to you and your business or they have suspected you of tax evasion.

If HMRC believes that you have lied on your tax return to reduce the amount of tax you need to pay or avoid it altogether, then they will open up an investigation into you and your business. Their course of action may vary slightly, dependent on the complexity or seriousness of the crime they believe you to be guilty of. However, this should be taken very seriously. To give you an idea of the powers that HMRC have, we’ve outlined the most common paths HMRC can take below.

Types of HMRC letter and what they mean for you

If you have received a COP9 letter, then HMRC has opened a criminal fraud investigation into you and your business. This is a grave allegation, and if found guilty of tax evasion, you can face criminal charges and if convicted, a large fine or possible jail time.

If HMRC issues you with a COP8 letter, then you are being informed that they suspect you of taking part in a large tax avoidance scheme or arrangement which has also been used by many other businesses and people. COP8 investigations involve HMRC gathering lots of information and evidence and should be treated very seriously as depending on what the tax office finds it could lead to a COP9 and criminal charges.

HMRC Powers for Tax Evasion

While HMRC is in the process of conducting a COP9 or COP8 investigation, they may issue you and your company with an accelerated payment notice (APN). This notice demands that you pay the amount of tax that HMRC calculate for you and you must pay within 90 days of an APN notice or further fines and charges will be added to your debt. If you have received an APN however, an accountant can help you to appeal the payment, but you should be quick about seeking advice and aid, so your accountant has plenty of time to view all the evidence and help you with your appeal.

HMRC do have the power to order you to surrender accounts and information during a COP8 and COP9 investigation, and they also have the power to obtain a legal search warrant and search your place of work and your home. HMRC can also have you placed under arrest if they deem it necessary and then search your property once the arrest has been made. HMRC compliance checks will see a tax officer visit your place of work to perform HMRC checks of your accounting.

However, during any criminal fraud investigation by HMRC, they are not obliged to inform you fully of what they are looking for and where they will be looking, and you only need to provide them information pertaining to this search.

If you and have been issued Accelerated Payment Notice or you have been asked about the potential criminal fraud investigation into your tax affairs. Contact our team of specialist accountants at Tax Accountant on 0800 135 7323.

By | 2017-10-03T10:04:39+00:00 August 10th, 2017|HMRC|0 Comments

About the Author:

Mr. Malik is a Pro active and result oriented accountant with broad experience in all aspects of accounting, financial management, and tax investigations. He is highly energetic and teams spirited with strong professional ethics, accurate, precise and highly ethical in all work related assignments – able to immediately contribute to goals and objectives. He has comprehensive experience in environments with problem resolution, economic and business functions, all in time critical, fast paced and high volume settings. He has been heavily involved with criminal fraud investigations and has made representations for his clients regarding tax evasion and tax avoidance matters to HMRC.

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