Fraud Investigation Service
The Fraud Investigation Service (FIS) branch of HMRC operates HMRC's Code of Practice 9 ("HMRC Investigations where we suspect tax fraud"), and COP 8 (tax avoidance). It also leads HMRC's ongoing campaign of investigating and challenging individuals and companies linked to offshore assets and structures. FIS is considered the elite investigation arm of the tax authority - and is mainly staffed by highly trained, experienced, high-flying investigators.
Code of practice 9 (‘cases where we suspect tax fraud’) explains the Contractual Disclosure Facility (CDF). This is only used in cases where serious tax evasion is suspected. FIS investigate suspected tax avoidance (e.g. trying to pay less tax by using tax 'loopholes' such as marketed or bespoke tax avoidance schemes, or though other structures such as trusts and offshore companies) under the terms of Code of Practice 8. Fraud Investigation Service units are based in each of the UK’s major cities.
HMRC Fraud Investigation Service has a remit to deal with serious, new, unusual and complex situations; and tax fraud and tax avoidance linked to offshore banks, trusts, companies etc. It aims to only take on cases where the likely “yield” (of tax, interest and penalties) will be over £500,000. Many of HM Revenue & Customs' largest prosecutions started in FIS; many beginning as tax avoidance investigations rather than tax fraud enquiries. FIS investigators use the whole range of HMRC's extensive information powers. They often carry out intrusive and exhaustive investigations. Such enquiries can be very damaging; especially as many Fraud Investigation Service cases involve extensive 3rd party enquiries (e.g. visits by the taxman to banks, business suppliers, customers, ex-employees, internet service providers etc.).
FIS investigators have small case loads and lots of support staff (including qualified accountants recruited from professional firms, computer forensic experts, specialist solicitors etc.), allowing them to devote considerable resource to each case. Dealing with a Fraud Investigation Service enquiry without your own specialist tax support can be hazardous (e.g. the risk of Criminal Prosecution); very expensive (as the tax and penalties bill is likely to be much higher than necessary); and very time consuming.
Penalties can be up to 200% of the extra tax they say is due (rising to 300% from 1 October 2018), and in tax fraud cases the taxman may publicly "name and shame" anyone they feel has not co-operated properly.
How can Lynam Tax Investigation Experts help me?
Not all HMRC Fraud Investigation Service cases result in penalties, and a small number do not result in any extra tax. However, persuading the cynical and hard-bitten FIS investigators of this and, most crucially, gathering and presenting the evidence to do so, can be an arduous task. But it's one which we at Lynam Tax Enquiry Experts have devoted our professional lives to.
Nb. If you, or your client, have received an HMRC Code of Practice 8 or 9 you need specialist help now. Do not delay.
For a free and totally confidential discussion,
Call Paul Lynam now: on 0845 643 9997
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