HMRC’s Fraud Investigation Service (FIS) is a specialised unit within the UK's tax authority, tasked with investigating serious cases of tax fraud, evasion, and financial crime. The FIS uses a range of powers, including criminal and civil investigations, to detect and address fraudulent activities.
Scope of FIS Investigations
The FIS investigates cases where HMRC suspects deliberate evasion of taxes or fraudulent claims, such as those related to R&D tax credits, VAT, income tax, and corporate tax among individuals or businesses.
Types of Investigations
There are two primary types of investigations carried out by the FIS:
Civil Investigations: These are used for cases where fraud is suspected but criminal proceedings may not be pursued. Instead, HMRC may impose financial penalties and require repayment of any wrongfully claimed amounts.
Criminal Investigations: These are initiated when HMRC suspects serious fraud or criminal activities. If sufficient evidence is gathered, the case may proceed to prosecution, potentially leading to fines, penalties, or imprisonment for those involved.
Process of an FIS Investigation
An FIS investigation typically begins with the issuance of a formal letter from HMRC to the individual or business under scrutiny. This letter outlines the nature of the investigation and requests documentation and explanations related to the suspected fraudulent activity. The investigation process can involve interviews, review of financial records, and potentially even forensic accounting.
What to Do if Under Investigation
If you or your business becomes the subject of an FIS investigation, it’s crucial to seek professional advice immediately. Responding to HMRC’s requests and cooperating fully with their investigation can mitigate potential penalties.
If you’ve received a notice of an investigation, our team are on hand to help.
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