HMRC’s elite fraud team collects £5.47 billion in extra tax – up 7% in just the last year

HMRC’s elite fraud team, the Fraud Investigation Service (FIS), collected £5.47 billion in extra tax last year*, an increase of £300m (6%) from £5.17bn the previous year, says Pinsent Masons, the international law firm.

The FIS is a centralised collection of HMRC’s best and most experience investigation teams, designed specifically to tackle the highest-value cases of suspected tax evasion and fraud.

Pinsent Masons explains that the FIS was formed by HMRC in 2015 following political pressure to increase the number of successful prosecutions for criminal tax evasion in the UK and offshore.

Pinsent Masons says that yield from the FIS’ civil investigations increased by 13% last year, up to £2.66 billion in 2017/18, from £2.36 billion the previous year. Yield from criminal investigations stayed level at £2.81 billion.

Although criminal investigations can be more high-profile and can be a useful tool of exerting public pressure on tax evaders, HMRC has been concentrating on expanding its civil powers to further its reach.

In July, HMRC published a consultation document proposing changes that would simplify and quicken the process by which it can access taxpayers’ information via third parties. One proposed change is the removal of HMRC’s requirement to go through a tribunal before forcing a third parties such as retailers, accountants or even social media platforms to provide information on a taxpayer.

Recent high-profile cases that have involved the FIS include: 

• The arrest of two men in Glasgow, following raids on two homes, who were supected of VAT fraud totaling £13 million
• The jailing of a tax consultant who ran a fraudulent scheme that helped him to steal £6.9 million in taxes deducted from workers’ wages
• Raids on homes and businesses in Glasgow involving an organised crime group accused of money laundering, benefit fraud, and mortgage fraud worth up to £4.6 million

Steven Porter, Partner at Pinsent Masons, comments: “HMRC has thrown serious weight behind its elite team of tax investigators, which now seems to be paying off given the overall increase in revenue.”

“It is clear that HMRC is doing more than ever to try to root out tax evasion – including asking for a relaxation on some independent checks on their civil powers.”

“Although we think it is pretty impressive that the amount they are collecting is still rising there are those in the Treasury who want more. Some see HMRC’s compliance teams as a magic porridge pot that will keep producing - no matter what. But to do that HMRC argues that it needs ever more sweeping powers - and the without the oversight, the checks and balances that helped ensure HMRC acted in a fair and proportionate manner.”