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HMRC internal manual

Excise Assessments Interim Guidance

Fraud and evasion cases: consideration of evasion

You should always consider the possibility of evasion in cases where an under-declaration of duty is involved. It may be that the under-declaration is a result of genuine error on the part of the revenue trader.

If this is the case, the conduct may not be deliberate or involve dishonest intent. On the other hand, if the under-declaration is deliberate or as a result of a person’s dishonest intent to evade or defer duty, that person may be liable to criminal proceedings or the issue of an appropriate penalty under either schedules 24, see CH410000 or Schedule 41, see CH90100.

In particular you should be alert to the possibility of evasion where prime assessments below the true liability are persistently paid.

You should also consult the guidance on issuing Schedule 24 penalties for under-assessments, which can be found at CH410000 and schedule 41, which can be found at CH90100.

A trader gains a cash flow advantage by paying a low prime assessment, even if he subsequently renders a return and pays all the tax due.

If a trader pays a prime assessment which at the time he knows to be lower than his true liability his conduct may constitute evasion.

For evasion to have taken place it is not necessary to demonstrate that the trader intended to permanently deprive HMRC of the tax, i.e. that he did not intend to correct the position at a later date.

You may also suspect evasion if a trader fails to keep satisfactory records to enable his liability to be easily determined. In cases where evasion is suspected you should refer the case, through line management, to the local fraud unit in accordance with local procedures (This content has been withheld because of exemptions in the Freedom of Information Act 2000) .

Guidance on the investigation of evasion is in X-52 Civil treatment of evasion (This content has been withheld because of exemptions in the Freedom of Information Act 2000) .