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HMRC internal manual

VAT Fraud

What to consider prior to determining whether to use an intervention: switching between modes of investigation (civil/criminal)

Most of our cases will be resolved using civil procedures, with or without penalties (VATF44300 and VATF45100).

However you must be aware of the possibility that the case may be sufficiently serious to require consideration for criminal investigation. Compliance staff will be required to issue HR leaflets at the point they suspect evasion. This does not stipulate to the trader that they consider a potential criminal offence has been committed that HMRC may consider investigating.

You must not discuss penalties with a person, or their agent, if you think there is any chance that a criminal investigation is appropriate.

Normally you would make any submission through the Evasion Referral Team (VATF84000) at an early stage. However a serious matter can sometimes arise without warning during a visit or meeting. CH300800 - The Human Rights Act and Penalties: Suspected deliberate evasion explains the actions to take.

There are circumstances where a case may give rise to consideration for criminal investigation where an inducement has already been given under the civil investigation procedures. For example, an arrears disclosure in response to an inducement offer is subsequently found to be significantly false and the evidence points to a deliberate attempt to deceive the investigating officers when responding to the inducement. For example, a trader may purport to co-operate fully following inducement, by admitting to a relatively minor evasion, while concealing from the officers the fact that a much larger and more serious evasion has occurred.

In this situation a referral should be made back through the Evasion Referral Team and the case be considered by Criminal Investigation.

If you have any questions regarding the above you should contact the Investigation and Civil Enforcement Policy Team before taking action.