Enquiries and inspections

HM Revenue & Customs: civil and criminal investigationsHM Revenue & Customs (HMRC) will investigate if they suspect dishonest evasion of VAT - a deliberate attempt to pay less tax than is due.

Civil evasion investigationsIn an initial meeting the officer will explain the procedures and why there is a concern with the accuracy of your records. You will then be given the opportunity to explain your situation. If there are matters for you to disclose you will be asked to provide an account in a report.

You will receive a letter detailing the amount of tax, interest and penalty due. If you agree with the letter you will receive formal notification of the assessment and request for payment. If you disagree with the letter you can ask for reconsideration. You also have the right to appeal.Penalties are normally equal to the VAT evaded but can be reduced by HMRC or an independent VAT tribunal.You can explain and disclose any irregularities during an interview. If you disagree with demand notices for arrears and penalties you can ask for reconsideration. You may also appeal. In this case, penalties are a percentage of the tax evaded.


Criminal investigationsReasons HMRC carry out criminal investigations include:the evasion concerns people who advise businesses about VAT matters, current or former tax officials or people in prominent positions,the evasion is carried out with other criminal activities ,there was a deliberate intent to deceive during a civil investigation