Corporate report

HMRC’s Fraud Investigation Service: technical note

Published 9 July 2026

HMRC’s Fraud Investigation Service’s approach to tax compliance and fraud

We define fraud as 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.

Tax fraud covers a wide range of illegal activity, including:

• deliberately submitting false tax returns
• falsely claiming repayments or reliefs
• hiding income, gains or wealth offshore
• smuggling taxable goods

Some of this is carried out by dishonest individuals but organised criminals also deliberately target the tax system for financial gain.

The best way to tackle tax fraud is to stop it happening in the first place. We do this by:

• building checks and controls into our systems
• changing legislation to make it more difficult or impossible to commit tax fraud
• working with businesses to help them spot when they are at risk of tax fraud

Most of our work to tackle tax fraud makes use of our civil powers. These allow us to get hold of the information we need to identify and collect unpaid tax, while imposing financial penalties on those responsible (up to 200 percent of the tax due in some cases).

In some serious cases of tax fraud, we can use the approach set out in our Code of Practice 9 (COP9): in exchange for individuals admitting their dishonesty, paying all their tax and significant financial penalties, they won’t face a criminal investigation, which otherwise could be the case.

While we reserve complete discretion to conduct a criminal investigation in any case, our approach is to use our criminal and specialist investigation capabilities in certain circumstances. This includes:

• when a fraud is particularly serious
• when we want to send a strong deterrent message that reassures the honest majority there is a level playing field
• when our civil powers aren’t enough to uncover the truth or recover the tax that is at stake

Criminal cases can be expensive and time consuming, so we use them selectively to ensure they deliver both value for money for the taxpayer and the maximum impact on tax fraud. In recent years, we have deliberately focussed them on the most harmful, complex and sophisticated frauds.

These are significant powers and are rightly subject to rigorous external oversight and safeguards, like other law enforcement agencies.

For more detail please refer to HMRC’s approach to tax fraud on GOV.UK.

Compliance yield for the Fraud Investigation Service in the financial year 2025 to 2026

The following table shows the compliance yield generated by the Fraud Investigation Service (FIS) during the financial year 2025 to 2026.

Tax regime	2025 to 2026 (£ million)
Corporation Tax	319
Excise	2,125
Income Tax	305
VAT	991
Other compliance interventions	466
Total	4,206

Note: Figures may not sum due to rounding.

Criminal case data

As noted above, FIS reserve complete discretion to conduct a criminal investigation in any case, including in cases where the behaviour is very severe, where civil sanctions alone won’t work and where a criminal prosecution will act as a strong deterrent to others. The below datasets represent the criminal aspects of our work across 2025 to 2026.

Criminal yield

Stopping and disrupting fraud via HMRC Criminal Investigations has delivered total Exchequer benefits of £2,114 million in 2025 to 2026.

Breakdown of criminal proceedings 2025 to 2026

Key definitions:

• Adoption: the formal point at which a criminal operation is taken on for investigation by FIS 
• Searches completed: Searches are only undertaken where necessary, justified and proportionate — all searches are conducted by trained officers and are authorised as part of live and planned interventions, including the execution of search warrants granted by a court, in line with the relevant legislation
• Positive Charging Decisions (PCDs): are the actual decisions made by independent prosecuting authorities to authorise the charging of an individual
• Prosecution: the total number of cases which have gone before the courts, (and can be calculated by adding together total convictions plus acquittals) — this will include pre-trial guilty pleas
• Conviction: when the pre-trial plea or trial outcome is recorded as guilty — this is directly correlated to the prosecution numbers

Criminal cases can be complex and involve several stages of detailed investigation and legal consideration. This can mean that cases take multiple years before being concluded and therefore outcomes achieved in any given year are not likely to be reflective of our activity in the same period. HMRC works in partnership with prosecuting authorities to progress our cases to conclusion through the criminal justice process.

Adoptions	Searches Completed	PCDs	Prosecutions	Convictions	Acquittals	Court Success Rate
494	626	468	300	260	40	87%

Note: There is no correlation between adoptions, PCDs and prosecution figures — they are separate occurrences in a particular Financial Year and should not be read in conjunction with each other.

Breakdown of sentencing data 2025 to 2026

This is the summary data of the sentencing outcomes as determined by HM Courts and Tribunals Service (HMCTS) once our investigations have concluded and the outcome of the associated prosecutions have been determined. The courts may also impose other sentencing such as fines, curfews and director disqualification. This data table only details the custodial/suspended custodial elements of the sentence and a single defendant could be counted in both data sets.

Number of Custodial Sentences	Custodial Sentencing (Months)	Average length of Custodial Sentencing (Months)	Number of Suspended Sentences	Suspended Sentencing (Months)	Average length of Suspended Sentencing (Months)
84	3,126	37	79	1,387	18

Civil Case Data

Civil Yield

In 2025 to 2026 FIS delivered £2,092 million in Exchequer benefits as a result of our Civil Investigations.

Tax Under Consideration

Tax under consideration is an estimate of the maximum potential additional tax liability in each case before we have carried out a full investigation of the specific facts or analysis of relevant law. It is not actual tax either owed or unpaid, it is a tool to guide our enquiries to focus on the most significant risks that exist at any particular time. In many cases, when we have looked at the full facts, it becomes clear that there is some lesser liability or even no further liability at all. Tax under consideration will naturally vary from time to time as outstanding issues are settled and new risks are identified.

The total is a snapshot of work in progress at a given point. Tax under consideration covers all taxes and duties.

A snapshot, as of 31 March 2026, of the tax under consideration figure for our civil enquiries by HMRC’s FIS Directorate is shown in the following table.

	Tax under consideration (£ million)
Total	2,462

Code of Practice 8 and 9

It’s HMRC’s policy to deal with suspected cases of fraud by use of civil fraud investigation procedures under COP9 wherever appropriate. Criminal investigation will be reserved for cases where HMRC needs to send a strong deterrent message or where the conduct involved is such that only a criminal sanction is appropriate.

COP9 is also used where taxpayers want to make a full disclosure of all irregularities in respect of their tax on the basis that HMRC will not pursue a criminal investigation into the conduct that they disclose.

HMRC uses COP8 to investigate any situation where it is believed that there may be a significant loss of tax. This includes the tax affairs of individuals, partnerships, limited liability partnerships (LLPs), companies and trusts and covers all of the taxes, duties, levies and contributions for which HMRC is responsible.

COP8 and COP9 work can straddle a number of reporting years; therefore, this data shows the number of investigations that are ongoing as well as how many were opened in 2025 to 2026 alongside the yield collected from those closed in 2025 to 2026.

Code of Practice	Total on Hand	Opened in year	Closed	Interest (£ million)	Penalties (£ million)	Total yield (£ million)
COP8	814	191	380	15.2	7	76.8
COP9	1,790	296	724	31.8	13.1	67.4

Note: The interest, penalty, and yield figures do not capture the full amount of yield from these cases as a proportion of the yield is allocated to other business areas in HMRC.