Specific deductions: crime (expenditure involving): criminal payments: handling of cases
You should only raise the possible disallowance of an expense on the grounds that it is a criminal payment if you find clear signs that it may be such a payment.
Raising the possibility of a disallowance for the payer necessarily means you are suggesting they may have committed a crime. This should not present a difficulty where the courts have already found the payer guilty of an appropriate offence.
Alternatively, legal advice may be provided which states that the payment in question was not criminal. If so, ask to see both the request for advice and the advice itself. Either or both should set out the facts on which the advice is based. You should then normally close the enquiry if the legal advice is unequivocal and apparently of good standing.
However, the technical position may be much less clear cut where the crime, if there is one, has not come to the attention of the courts and there is no other conclusive legal advice. You should therefore refer to CTISA (Technical) for advice at an early stage.
Sometimes, however, the payer’s inability to provide satisfactory evidence about the nature of payments, or the payee’s name and address, may be a sufficient reason for seeking a disallowance.
Passing on information
Where possible pass on details of bribes etc paid to the recipient’s tax office so that any tax liability can be considered.
To the police:
HMRC has a legal gateway for sharing information with the police and certain other enforcement authorities in the Anti-Terrorism, Crime and Security Act (ATCSA) 2001. This gateway allows the disclosure of information which will be used for the purposes of a criminal investigation or proceedings, or for the initiation or termination of an investigation or proceedings. If you have uncovered information about criminal activity in the course of your work, you should consider disclosing it to the police through this gateway.
All disclosures of information under ATCSA must be made through the Information Policy and Disclosure Team (IPDT). They will be able to advise you on whether the information should be shared with the police and the processes involved in doing so. You should not disclose other than under IPDT’s direction.
For further details on disclosing information to enforcement authorities, see IDG50100. You can find details of how to contact the IPDT at IDG80100.
To overseas revenue authorities:
Where payments are made to foreign residents, you should consider whether this information may be of assistance to an overseas revenue authority (e.g. the payment may be taxable income in the hands of the recipient). The guidance on providing information to overseas revenue authorities can be found at INTM156010 onwards.
Again, all disclosures must be made through the IPDT.