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What is HMRC’s Fraud Investigation Service (FIS)?
The Fraud Investigation Service (FIS) is HMRC’s premier division dedicated to tackling serious cases of tax fraud and evasion. Formed in 2015, the FIS was created by merging the Criminal Investigations Unit and the Special Investigations Unit. This division handles both civil and criminal investigations with the primary goal of safeguarding UK public finances. The unit boasts an impressive compliance yield, collecting billions in taxes and preventing future tax losses through its corrective actions.
Who Are HMRC’s FIS Officers?
FIS officers are some of the most skilled and experienced investigators at HMRC, well-versed in complex tax laws and investigative techniques. These officers operate across multiple regions in the UK, each team functioning independently but following HMRC’s guidelines. They handle cases ranging from serious tax fraud to underpayment of taxes through civil investigations.
Criminal vs. Civil Investigations
While criminal investigations are rare, they are reserved for the most severe cases or where HMRC intends to make an example to deter other taxpayers. In the 2022/23 tax year, HMRC achieved 218 criminal convictions. These investigations are both time-consuming and expensive for HMRC, and as a result, they tend to focus their resources on large-scale or high-profile cases.
Most cases handled by FIS are civil investigations under either Code of Practice 8 (COP8) or Code of Practice 9 (COP9). COP8 applies when HMRC suspects complex tax avoidance schemes but does not initially suspect fraud. COP9 is invoked if HMRC suspects deliberate tax evasion or fraudulent activity.
Fraud, in HMRC’s view, includes any intentional misrepresentation, concealment of information, or submission of false tax returns. COP9 offers taxpayers the opportunity to make a disclosure and receive immunity from prosecution, but failing to do so can result in more severe penalties or criminal proceedings.
What to Do if You’re Under FIS Investigation
Receiving a letter from HMRC’s Fraud Investigation Service can be alarming. It is crucial to seek expert advice immediately. HMRC may request a meeting as part of the investigation, and while you are not legally obliged to attend (unless under criminal investigation), declining a meeting without good reason could lead to harsher penalties.
Specialist tax advisors should attend any meeting with HMRC to ensure your interests are fully protected. After the meeting, HMRC will provide meeting notes, and these should be carefully reviewed to avoid misunderstandings or errors that could affect the outcome of your case.
The Importance of Specialist Advice
Navigating an FIS investigation without professional advice can be risky. Tax investigations can escalate quickly, potentially leading to significant penalties, interest charges, and even prosecution. Engaging a specialist advisor with experience dealing with HMRC’s Fraud Investigation Service can help you manage the investigation efficiently and minimise your financial exposure.
Our team at Tax Dispute Experts includes former HMRC officers with a deep understanding of FIS procedures. We can:
Review your tax affairs comprehensively to identify risks
Develop a strategy to minimise tax, interest, and penalty exposure
Guide you through the disclosure process, ensuring you are treated fairly
Prevent the investigation from expanding unnecessarily
Work to fast-track the resolution of your case
How FIS Protects Public Services
FIS plays a vital role in protecting public finances by investigating tax fraud and securing criminal convictions when necessary. With a team of around 5,000 professionals, including forensic accountants and cybercrime specialists, FIS uses a combination of civil and criminal powers to target high-impact tax evasion schemes. Every year, their efforts secure billions of pounds in funding for UK public services.
Conclusion
If you are under investigation by HMRC’s Fraud Investigation Service, it is essential to act quickly and seek professional advice. Whether it is a criminal or civil investigation, the consequences of mishandling the process can be severe. At Tax Dispute Experts, we are here to help you navigate the complexities of an FIS investigation, safeguard your interests, and resolve your tax issues with minimal disruption.
For confidential advice, contact us today to discuss how we can support you through this process.