Civil Investigation of Fraud - why you need an adviser  

An expert tax adviser can help you approach a Civil Investigation of Fraud in a professional and compliant manner

Being the subject of a Civil Investigation of Fraud by HMRC is a serious matter. Whether you comply or not, your personal and business affairs will be investigated by specially-trained tax Inspectors who are looking for reasons why your unpaid tax bill comes to £75,000 or more. HMRC chooses to carry out a Civil Investigation of Fraud where it feels a criminal investigation is unnecessary. You will not find yourself the subject of a criminal prosecution by HMRC for these specific tax issues unless you knowingly withhold information or make deceptive or materially false disclosures during the course of a civil investigation.

How a Civil Investigation of Fraud adviser can help

HMRC's Code of Practice 9 (2005) covers the Civil Investigation of Fraud process and makes reference several times to the role an adviser can play in your investigation. A copy of this document will have been included with your notification letter and you should read it carefully to make sure you understand the process. Here are some specific areas where a good adviser can help:

"We will ask you to a meeting and invite you to make a full disclosure of all tax irregularities. This will be your only opportunity to secure the maximum benefit from making a full and complete disclosure of all irregularities in your tax affairs."

This is an important meeting because it is the best forum for you to discuss the current situation and how it can be resolved. Your attendance at this meeting shows that you are willing to comply with the situation and, if you are accompanied by a tax adviser, the HMRC Inspectors will see that you are making all efforts to sort out the problems that have arisen. In addition, if your tax adviser is already known to the Inspectors, he or she will provide a level of comfort about the advice you are being given and the nature and professional standard of the reports that will be submitted on your behalf.

"We would encourage you to appoint a professional adviser to represent you during our investigation although this is a matter for you to decide . . . We expect high standards from professional advisers. We will normally deal with your adviser but if there are delays or difficulties we may deal directly with you."

HMRC knows that it is easier for you to meet their requirements if you have specialist help. You are responsible for ensuring that the adviser you appoint has all the relevant information they need, and that the information is up-to-date and accurate. Whilst HMRC can deal directly with your adviser, you are also held responsible for ensuring that your adviser meets the timetable agreed between you and HMRC.

"We will discuss the Disclosure Report with you and your advisers. We will monitor closely preparation of the Disclosure Report to ensure it is progressing to the agreed timetable. This will usually involve regular meetings with your advisers."

The outcome of your meeting with HMRC Inspectors is usually the preparation of a full disclosure report. The items to be included in this report are defined at the meeting and you will have to sign several declarations about the accuracy of the statements in it. It is far better for a specialist adviser to prepare this report. They will have experience of producing documents for HMRC and will be familiar with the form and content needed in order to satisfy the investigation. Although it is your responsibility to ensure that everything is accurate and nothing is left out, your adviser can save you time and money by preparing the report and speaking to HMRC Inspectors on your behalf.

If you have received notice from HMRC of a tax investigation or Civil Investigation of Fraud proceedings, call us for help and advice today. All enquiries are strictly confidential, so phone 0800 734 3333 or e-mail scott.gilbert@gilberttax.co.uk now

For more information about the different types of tax investigation cases we deal with on a regular basis please click here.

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