H M Revenue & Customs have complete discretion to conduct a criminal investigation in any case.  The reality is that most investigations are concluded on a civil basis but not all.

Where H M Revenue & Customs consider that a deterrent for others can be made from a prosecution, a case is so serious that on its own merits a prosecution is appropriate or if a taxpayer fails to make a full and complete disclosure under the Code of Practice 9 a prosecution may follow.

The prosecuting ‘authority’ is the Revenue & Customs Prosecutions Office (RCPO) although the investigation of cases is undertaken by officers in Specialist Investigations and Civil Investigation of Fraud Teams.

Matters that H M Revenue & Customs consider more likely to be dealt with on Criminal lines are set out in their prosecution policy and at the last update in late 2008 those matters were:

• Making false statements or supplying false documents to HMRC during an investigation.
• Deliberate concealment, deliberate deception, corruption or conspiracy is suspected.
• Using forged or false documentation.
• Where there is a history of tax offences or a repeated course of unlawful conduct or where there have been previous investigations.
• Suspicions involving persons in positions of trust, accountants, solicitors, Magistrates.
• Misrepresenting fact or altering or falsifying documentation to secure a tax advantage (especially as regards a tax avoidance scheme).
• A systematic fraud where the nature of the fraud or the amount of tax evaded could be considered a threat to the general tax base.
• Conspiracy

In addition to the above it is clear that long term failure to notify chargeability cases are considered at an early stage for prosecution.

Criminal investigations utilise the powers embodied in the Police and Criminal Evidence Act (PACE) and so appropriate legal representation should be sought. 

It is possible to persuade H M Revenue & Customs to deal with matters on a civil basis but that will require a considerable effort to convince inspectors that a full and complete disclosure will be made.  We have a wealth of experience in such matters and if the authorities insist on dealing with matters on a criminal basis we can help you find the right legal representation through our network of contacts and we can assist the legal team to defend your position.

In any situation where H M Revenue & Customs make it clear that they are working the case as a prosecution or they issue Code of Practice 10 (COP10) you must urgently seek help and advice.