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HMRC internal manual

Compliance Handbook

Charging Penalties: establishing penalty behaviour: evaluating evidence: evidence of concealment

An inaccuracy, failure or VAT or excise wrongdoing is concealed when the person took active steps to cover their tracks by making arrangements to hide what they had done.

The act of concealment may include

  • creating false invoices
  • backdating or postdating contracts or invoices
  • destroying books and records so that they are not available
  • creating false minutes of meetings or minutes of fictitious meetings
  • diverting takings into undisclosed bank accounts
  • invoice routing, for example the purported sale or purchase of goods through a tax haven company (with no activity undertaken by that company even though contracts exist showing the contrary) leaving profits untaxed in that company
  • creating sales records that deliberately understate the value of the goods sold, the balance of the full price being paid separately to the person
  • describing expenditure in the business records in such a way as to make it appear to be business related when it is in fact private (possibly with the supplier agreeing to change the description on the relevant invoices)
  • altering genuine purchase invoices to inflate their value
  • compiling false business accounts to support the availability of agricultural or business relief from IHT
  • mis-declaring the strength of alcoholic products on paperwork and accompanying documentation.

Further guidance on and examples of concealment are in the technical guidance at

  • for inaccuracies, see CH81100 
  • for failure to notify, see CH72000 
  • for wrongdoing, see CH93000.