Dawn raid sees trio arrested for suspected Corporation Tax Fraud

Three men have been arrested in connection with a tax fraud investigation, by HM Revenue and Customs (HMRC).

More than 30 officers from HMRC searched three residential properties and one business address during morning raids in the West Midlands.

It is believed that the tax investigation involves a suspected attempt to fraudulently claim £300 million in Research and Development (R&D) tax credits.

R&D tax relief is an incentive available to certain businesses, which allows them to undertake research and development, helping to support innovative companies in the UK.

The investigation, involves a suspected tax fraud worth an estimated £300 million over five years. During the dawn raid computers and business records were seized.

Martin Brown, Assistant Director, Fraud Investigation Service, HMRC, said: “Any abuse of the R&D tax relief scheme is defrauding a system put in place to help legitimate businesses grow and develop. We will continue our work to tackle any fraud or attempted fraud, to ensure taxes are directed to where they should be and not into the pockets of criminals. No one is beyond our reach.”

The men, one aged 40 from Leamington Spa, one aged 44 from Birmingham and another aged 49 from Coventry, who were all arrested on 28th June, were interviewed by HMRC and have been released on bail as investigations continue.

Dr Anjulika Salhan, a director and tax investigation specialist with Salhan Accountants commented: “Under HMRC’s wide reaching criminal investigation powers, where tax fraud is suspected, HMRC can apply for a warrant to enter and search and may use reasonable force to execute the warrant.

“This visit from HMRC, under the authority of a search warrant, is what is often referred to as 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 HMRC team leader and checks what the search warrant allows HMRC to do. It is worth remembering that any staff who are present can also be searched if HMRC has 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.

“During a dawn raid the trader must not attempt to obstruct HMRC’s visit, but should seek immediate professional assistance. Our Tax Investigation team offers out of office support for clients who are the subject of a dawn raid.

“At Salhan Accountants, we work extremely hard for clients subjected to a taxation investigation. We not only clarify the issues and the process, but come up with solutions too. Our experience, professional reputation, forensic attention to detail and negotiating skills mean we are well-placed to achieve positive outcomes.

“Whether an individual or company, talking to us is your best step towards addressing a taxation investigation and moving on with your life.”

For more information about our taxation investigation services, please contact us.