Monday 2 December 2019 12:01 am

HMRC collects extra £5.4bn via specialist fraud investigation team

HMRC has collected £5.4bn in additional tax and fines through its fraud investigation service in the last year, figures published today show.

Tax and fines collected through investigations into criminal gangs importing illegal cigarettes and alcohol represented £2.9bn of the total, law firm Pinsent Masons said.

Another £1bn was collected through investigations into VAT fraud, including carousel fraud.

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Carousel fraud occurs when fraudsters exploit rules allowing goods to be imported VAT-free from other countries then sell the goods to domestic buyers, charging VAT. 

The sellers then disappear without paying tax to HMRC.

Jason Collins, head of tax at Pinsent Masons, said: “The fraud investigation service is considered to be HMRC’s elite fraud squad and with good reason – it has been very effective in stopping billions of pounds in evasion.” 

“We expect that HMRC will continue investing heavily in this team and feeding it as many cases as it has capacity for.”

Last year, the service launched over 31,000 civil and more than 760 criminal investigations. 

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HMRC launched 42 prosecutions related to serious and complex crimes and secured more than 640 criminal convictions for tax and duty fraud. Almost 640 years jail time were handed-down by the courts last year. 

An HMRC spokesperson said: “We’re committed to ensuring that all companies and individuals pay the right tax at the right time and will pursue those who fail to do so. 

“We use a range of civil and criminal powers to tackle those committing serious fraud. It can lead to prosecution and imprisonment, life-changing penalties, seizure of assets, and sanctions. We take all necessary steps to recover money owed.”

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