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HMRC internal manual

Fraud Civil Investigation Manual

Where CDF offer is made 30 June 2014 onwards: general: impact of the Police and Criminal Evidence Act 1984 on civil procedures for dealing with fraud

As part of the Court of Appeal’s scrutiny of the Hansard procedure in R v Gill and Gill (2003) STC 1229, the court determined that as prosecution for any evasion of tax had not been ruled out by the investigators, they were charged with the duty of investigating offences within the terms of section 67(9) of the Police and Criminal Evidence Act 1984 (PACE). As such the protections of PACE Code C should apply to such investigations.

The issue of whether or not PACE should be used was also considered by the High Court in relation to former Customs’ procedures in the case of Khan v Commissioners of Customs and Excise (2005) STC 1271. In this instance it was held that as the appellant was told at interview that the matter was not being investigated with a view to prosecution, the situation was distinguishable from Gill. Where the officers conducting the interview are not ‘charged with a duty of investigating (criminal) offences’ the safeguards of PACE Code C do not apply.

In the light of the decisions in Gill and Khan, HMRC’s view is that, for any investigation started after 1 September 2005, PACE Code C does not apply to any investigation work being undertaken under COP9.

The only circumstance when PACE Code C will apply is when the investigation is taken up by Criminal Investigation (CI), in which case it will not be under COP9. It is not open to COP9 investigators to commence a criminal investigation, and this is important in establishing that PACE Code C does not apply to COP9 investigations.

The decision to conduct a criminal investigation can only be made by CI and you are only authorised to conduct a civil investigation. You must work your investigation under COP9 with a view to a civil settlement only. If CI decide to take over the case then your involvement will cease.

If, during the course of your investigation, you find evidence of further frauds then you must consider a referral to CI.

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)