HM Revenue & Customs (HMRC) arrests three as part of investigation into suspected £300m corporation tax scam

Hayley Kirton
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"While an attack on the tax system is often thought victimless, it isn't," said HMRC's Martin Brown (Source: Getty)

Three men have been arrested as part of an investigation into a suspected corporation tax scam, HM Revenue & Customs (HMRC) announced today.

More than 30 HMRC officers carried out morning raids on one business and three residential addresses in the West Midlands yesterday, and computers and business records were seized as part of the operation.

The men involved, one aged 40 from Leamington Spa, one aged 44 from Birmingham and another aged 49 from Coventry, were interviewed by HMRC and released on bail

Had it been successful, the suspected scam is thought to have been worth around £300m over five years and involve false claims for research and development (R&D) tax relief. HMRC's investigation into the suspected scam is ongoing.

"While an attack on the tax system is often thought victimless, it isn't," said Martin Brown, assistant director, fraud investigation service at HMRC. "It means that the public lose out on vital funds for essential services. Any abuse of the R&D tax relief scheme is defrauding a system put in place to help legitimate businesses grow and develop. We will continue our work to tackle any fraud or attempted fraud, to ensure taxes are directed to where they should be and not into the pockets of criminals. No one is beyond our reach."

R&D tax relief essentially allows companies to offset their corporation tax bill against some of their expenditure on R&D, and is intended to act as an incentive for companies to innovate.

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