Criminal investigations

HMRC will investigate most cases of suspected tax fraud using its civil information and inspection powers. However, in some cases it will use its criminal investigation powers.

These are wider ranging than its civil powers. For instance, under its civil powers HMRC can visit business premises and carry out an inspection, but the inspection must not amount to a full search and it cannot force entry.

However, under its criminal powers, when investigating a suspected offence HMRC can apply for a warrant to enter and search and may use reasonable force to execute the warrant.

A visit from HMRC under the authority of a search warrant is sometimes known as a dawn raid.

Managing a Dawn Raid

Our Tax Investigation team offers out of office support for clients who are unfortunateenough to be the subject of a dawn raid. HMRC has the power to inspect the trader’s premises and, if the trader is present, will be presented with a search warrant.

It is important that the trader:

  • Identifies who is the Team Leader.
  • Checks what the search warrant allows HMRC to do. Remember that staff can be searched if HMRC have reasonable cause.

We would advise the trader to take copies of computer files, as HMRC may remove the computers and the trader will be without information for many months.

The trader must not obstruct HMRC’s visit and should seek immediate professional assistance.

If you find you are the subject of a dawn raid please contact us immediately.

HMRC's criminal investigation powers also permit it to:

  • Seize and retain anything covered by a search warrant
  • Arrest (without warrant) someone it reasonably suspects to have committed an offence
  • Search suspects following arrest
  • Enter and search premises of arrested persons

Circumstances in which HMRC will consider a criminal rather than a civil investigation include:

  • Cases of organised criminal gangs
  • Where false statements are recorded or false documents are provided in the course of a civil investigation
  • If the credibility of an avoidance scheme is in question due to false or altered documents
  • Cases involving money laundering

HMRC will also usually resort to a criminal investigation where cases involve VAT missing trader intra-community (MTIC) fraud, and organised tax credit fraud.

If you are the subject of a criminal investigation you need to seek urgent support and professional representation. Please contact us now.