Who are The Fraud Investigations Service Unit

HMRC

The role of HMRC’s Fraud Investigations ServiceThe Fraud Investigations Service Unit (FIS) are tasked by HMRC to carryout investigating cases of suspected serious and high value tax fraud and tax avoidance, both in this country and offshore. 

With a commitment to combating tax evasion and fraud at its core, the FIS comprises a cadre of exceptionally skilled individuals who engage in both criminal and civil investigations with utmost proficiency.

Their collective expertise and wealth of experience make them an unparalleled force in the realm of financial scrutiny, ensuring that no transgressor can escape the rigor of their investigations.

As a driving force within HMRC, the FIS upholds the highest standards of excellence, epitomizing the pinnacle of investigative prowess and fortifying the foundation of a fair and just tax system

The role of HMRC’s Fraud Investigations Service

The role of HMRC’s Fraud Investigations Service is of paramount importance in upholding the integrity of the UK’s tax system. As an elite unit dedicated to combating tax evasion and fraud, the FIS plays a pivotal role in safeguarding the nation’s financial interests.

Armed with a cadre of highly skilled and experienced investigators, the FIS meticulously examines suspected cases of tax misconduct, leaving no stone unturned in their pursuit of justice. Their dual mandate encompasses both criminal and civil investigations, ensuring that any wrongdoing is met with appropriate legal measures.

By relentlessly pursuing those who seek to undermine the tax system, the FIS protects the revenue that funds vital public services and fosters a level playing field for all law-abiding taxpayers. In essence, the FIS serves as a pillar of fiscal responsibility, reinforcing the notion that tax evasion will not go unchallenged in the UK.

Why was the Fraud Investigations Service set up?

Under the weight of government pressure to enhance efforts against tax evasion and fraud, HMRC’s Fraud Investigations Unit has proven to be a resounding success. As demonstrated by figures published by Pinsent Masons, a reputable international law firm, the FIS has accomplished remarkable outcomes in bolstering tax compliance and recovering lost revenues.

In the year ending March 2018, the FIS secured an impressive £5.47 billion in additional tax revenues, marking a significant 6% increase compared to the previous year. This notable achievement speaks to the FIS’s unwavering commitment to clamping down on criminal gangs and curbing illicit financial activities.

Moreover, the FIS excelled in civil tax investigations, delivering an exceptional 13% surge in recovered revenues during the 2017/18 period when contrasted with the preceding year. This substantial progress exemplifies the FIS’s meticulous and effective approach in uncovering instances of fraud and ensuring that tax obligations are met appropriately.

Through its resolute efforts, the Fraud Investigations Service has not only achieved substantial financial gains for the exchequer but also reinforced the message that tax evasion and fraud will not go unaddressed. As a testament to its success, the FIS continues to stand as a formidable guardian of fiscal responsibility, safeguarding the nation’s financial interests and fostering a climate of compliance among taxpayers.

How does the Fraud Investigations Service operate?

The civil investigations arm of HMRC’s Fraud Investigations Service has garnered significant recognition for its work in two key areas: investigations conducted under Code of Practice 9 and Code of Practice 8.

  • Code of Practice 9 investigations come into play when substantial amounts of tax are suspected to be involved, and instances of fraud or dishonesty are believed to have occurred. This rigorous process is initiated to thoroughly examine the circumstances and ensure appropriate actions are taken to address any misconduct.
  • Code of Practice 8 investigations are centered around bespoke tax avoidance schemes or situations where Code of Practice 9 is deemed inappropriate. FIS approaches these cases with equal diligence, aiming to tackle complex tax avoidance schemes and safeguard the integrity of the tax system.

Given the gravity of any investigation involving FIS, seeking skilled professional advice is strongly recommended, as emphasized in HMRC’s COP9 leaflet. Engaging independent expertise can be crucial in navigating the complexities of such investigations and ensuring fair and just outcomes for all parties involved.

Over the years, the civil investigations unit of FIS has experienced significant growth, both in terms of staff numbers and the breadth of its scope. Expanding beyond its initial focus, FIS now encompasses specialized units such as the Labour Providers Unit, which targets labor-related tax matters.

Additionally, FIS has taken on responsibilities in tackling VAT fraud, insolvency cases, and Inland Detection efforts concerning fuel duty, alcohol, and tobacco duty.

Different departments within FIS

There are a number of different departments within FIS these include:

FIS Prosecutions team

The HMRC’s dedicated team of 600 skilled tax investigators and prosecutors is steadfastly committed to identifying taxpayers who might be involved in serious early-stage tax avoidance. Remarkably, the majority of the team’s prosecutions are conducted through civil means rather than criminal proceedings. In the notable year of 2018, nearly 1,000 individuals faced charges mainly related to “cheating” under common law.

The investigators’ prowess in prosecuting offenders has yielded significant results, leading to convictions and, in a majority of cases, the successful attainment of Money Laundering Regulations confiscation orders.

The HMRC’s prosecutions division extends its focus to tackle the intricate challenge of VAT fraud. This particular form of tax poses considerable difficulty in evasion due to its transaction-based nature, mandating reporting for each sale made. Consequently, the HMRC employs a meticulous approach to identify potential instances of underreporting and underpayment by meticulously comparing the financial records of suspected companies to those of other businesses in the same industry.

Through the concerted efforts of this diligent team, the HMRC continues to demonstrate its commitment to maintaining the integrity of the tax system and safeguarding the nation’s financial interests. The persistent drive to combat early-stage tax avoidance and VAT fraud reinforces the HMRC’s reputation as a formidable guardian of fiscal responsibility.

Bootle branch of FIS

In the discerning realm of tax investigations, the Bootle department of FIS directs its attention towards taxpayers where no known overseas or offshore bank accounts or assets are in question. In such instances, suspicions of serious tax fraud may arise, prompting the department’s personnel to engage in meticulous scrutiny. As guardians of fiscal integrity, this department focuses predominantly on suspected cases of major domestic fraud, effectively safeguarding the UK’s financial landscape.

Contrary to prevailing assumptions, the majority of tax fraud cases do not revolve around individuals or businesses with offshore financial holdings, properties, or assets. The astute investigations carried out by the Bootle department underscore the fact that tax fraud can manifest in diverse ways within the country’s borders, and their vigilance ensures no potential avenue for misconduct goes unexamined.

Through their unwavering commitment to upholding fiscal responsibility, the Bootle department of FIS exemplifies the essence of thoroughness and diligence, reinforcing the notion that every taxpayer, regardless of their financial profile, is subject to scrutiny in the pursuit of a fair and just tax system

FIS task force

Stepping in as the vigilant enforcers of tax compliance, the task force operates with surprise visits to business locations, undertaking meticulous examinations to ensure accurate reporting and payment of various taxes. Their comprehensive investigations encompass VAT, National Minimum Wages, income tax, and corporation tax, leaving no aspect of tax obligations unexplored. The dedication to their mission is evident in the time and effort invested, with their thorough scrutiny extending over days or weeks.

Should your business be graced with the task force’s presence, it is prudent to request the presence of your trusted accountant during their visit. With their expertise, your accountant can provide valuable support and ensure that all relevant information is correctly conveyed, ensuring a smooth and transparent interaction with the task force.

The task force’s unannounced inspections may seem daunting, but they reflect the unwavering commitment of HMRC to maintain a level playing field for all businesses, promoting adherence to tax regulations across various aspects. As proactive protectors of fiscal integrity, the task force leaves no room for ambiguity, reaffirming the importance of timely and accurate tax reporting for all enterprises.

Frequently asked questions

Who is the fraud investigation services?

The fraud investigation services are a select HMRC team due to the expertise, skill, and experience of the individual investigators. The team is tasked with investigating cases of suspected serious and high value tax fraud and tax avoidance, both in this country and offshore.

What is HMRC fraud investigation service?

HMRC fraud investigation service investigate any deliberate omission, concealment or misinterpretation of information, or the false or deceptive presentation of information or circumstances in order to gain a tax advantage.

Conclusion

In conclusion, the Fraud Investigations Service of HMRC stands as a formidable force in the relentless pursuit of tax compliance and the combat against fraud. With a dedicated team of skilled investigators and prosecutors, the FIS diligently addresses serious early-stage tax avoidance and VAT fraud, bolstering the integrity of the tax system.

Through their unwavering commitment to thorough investigations, the FIS ensures that no potential avenue for misconduct goes unexamined, providing taxpayers with the assurance that any wrongdoing will be met with appropriate action. Whether it’s the Bootle department focusing on major domestic fraud or the task force conducting surprise visits to business locations, the FIS leaves no stone unturned in upholding fiscal responsibility and fostering a fair and just tax environment.

With their expertise and unwavering dedication, the FIS continues to be a cornerstone in safeguarding the nation’s financial interests and promoting compliance among taxpayers.

David Hanman Consultant Solicitor

David is a Solicitor and Chartered Tax Advisor. David has many years experience of advising clients on Regulatory Fraud matters, involving the smallest to the very biggest cases.

He regularly lectures to the City of London Police on these and related issues. He regularly advises on Confiscation and other consequences that flow from money laundering offences