Rahman Ravelli is recognised for being one of the top-tier legal firms when it comes to representing individuals and corporates in major tax investigations and prosecutions.
Our lawyers have the skills and the tactical acumen to secure the very best conclusion to tax matters in either a criminal or civil context. At any given time, they are involved in the most high-profile, high-value and complex national and global tax cases.
Large-scale tax evasion is now higher on HM Revenue and Customs’ (HMRC) agenda than it ever has been. Partnerships, limited liability partnerships, limited companies, public limited companies, sole traders and individuals are under greater scrutiny, having to meet tougher reporting requirements and facing greater chance of being investigated.
Rahman Ravelli excels when it comes to defending both the professionals and advisors who are the architects of tax schemes and the major business figures and high net worth individuals (HNWIs) who are the beneficiaries of such schemes.
We represent directors, chief executive officers, chief financial officers and all other senior business individuals, financial professionals and institutions, academics, lawyers and HNWIs who may be investigated regarding tax advice they have given, tax schemes that they are involved in or matters such as pension liberation.
HM Revenue and Customs (HMRC) has a wide range of powers; including the ability to raid premises. Those investigated by it must seek representation from lawyers with years of experience in challenging and negotiating with HMRC.
Rahman Ravelli is known for its astute handling of matters in order to secure a non-contentious resolution. But we also possess an admirable track record when it comes to representing clients in contested proceedings.
With the HMRC having a wide range of powers, the right response can be the difference between a prosecution being brought and the HMRC deciding not to proceed. It can ensure that any allegations are successfully challenged and then dropped. And it can be the beginning of a course of action that means the best possible outcome is obtained, however unlikely that may have originally appeared.
Advice regarding what is the right response can only come from solicitors who are experts in this field and who have vast experience of dealing with the HMRC at the highest possible levels on the most challenging tax investigations.
As a firm that has spent decades challenging HMRC on everything from tax avoidance, pension liberation and the largest MTIC (missing trader intra-community fraud) and diversion fraud cases, we are well-versed in knowing how its investigators will act – and how best to respond to them.
Tax investigations are rarely simple. They can be lengthy and complex. HMRC has a variety of penalties it can impose, from ordering the payment of unpaid tax through to handing down a fine or bringing a prosecution. An individual or organisation facing such an investigation cannot afford to treat the matter lightly. The potential penalties and long-term damage an investigation can cause make it imperative that the right advice is sought immediately.
If HMRC has reason to believe that you are not paying the right amount of tax via arrangements such as pension schemes, employee benefit trusts or other tax and investment schemes, it may open a Code of Practice 8 (COP 8) investigation to claim money it says it is owed plus additional penalties and interest. Where a serious tax fraud is suspected, HMRC may investigate using the Code of Practice 9 (COP 9) investigation of fraud procedure, whereby taxpayers are given the opportunity to explain via a Contractual Disclosure Facility all their deliberate and non-deliberate conduct that has led to irregularities in their tax affairs.
HMRC decisions can usually be appealed. This is done initially by writing to HMRC and then, if that is not successful, by appealing to the tax tribunal system.
The tribunal system is two-tiered, with an appeal being made at first to the Tax Chamber of the First-Tier Tribunal.
If the First-Tier Tribunal’s decision is considered unsatisfactory by the appellant, they can appeal against it – if the First-Tier Tribunal grants permission – to the Tax and Chancery Chamber of the Upper Tribunal.
As with all aspects of dealing with the HMRC, a strong, reasoned and well-argued case is vital if success is to be achieved.
Since 30 September 2017, companies and partnerships can be held criminally liable, under the Criminal Finances Act 2017, if they fail to prevent the facilitation of domestic or overseas tax evasion; whether or not they were aware of or involved in the misconduct.
This offence of failure to prevent tax evasion gives considerable extra power to HMRC. It also places a great responsibility on those in business to ensure that they have adequate procedures in place to prevent the offence being committed. Having reasonable prevention procedures in place is the only defence to such an allegation.
Rahman Ravelli represents those facing such allegations. But we are also in demand for our ability to devise prevention procedures that can provide the defence to those allegations
Read our guide: "HMRC Tax And Vat Investigations: Using Our Expertise To Protect Your Interests" as we explain why Rahman Ravelli is the logical choice for the person or company that requires such advice.
HMRC conducts a wide range of investigations, from civil compliance checks through to serious criminal investigations. At the civil end, these include enquiries under section 9A of the Taxes Management Act 1970, VAT assessments, and Code of Practice 9 (COP9) investigations into suspected serious tax fraud, which offer the opportunity to settle via a Contractual Disclosure Facility (CDF). At the criminal end, HMRC's Fraud Investigation Service (FIS) investigates and prosecutes serious tax fraud, VAT fraud (including carousel/MTIC fraud), money laundering of the proceeds of tax evasion, and payroll fraud.
COP9 is HMRC's procedure for investigating suspected serious tax fraud by an individual or company where HMRC suspects deliberate non-compliance. The process involves HMRC issuing a formal notice and offering the subject the opportunity to disclose all deliberate tax irregularities through the Contractual Disclosure Facility (CDF). Making an honest, complete, and accurate disclosure under the CDF gives the subject immunity from criminal prosecution in relation to matters disclosed. Failing to disclose, or making a fraudulent disclosure, removes that protection and can lead to prosecution.
MTIC fraud, also known as carousel fraud, is a form of VAT fraud that exploits the zero-rating of cross-border transactions within the EU (and similar arrangements post-Brexit) to generate fraudulent VAT repayment claims. A chain of transactions is orchestrated in which a 'missing trader' (a company that charges VAT to its customer but then disappears without paying that VAT to HMRC) forms part of the chain, while another company in the chain claims repayment of VAT it never actually paid. HMRC investigates MTIC fraud aggressively, and it is one of the most complex and vigorously contested areas of tax litigation.
Yes. HMRC has a published strategy of criminal prosecution for the most serious and egregious cases of tax fraud, particularly where there is evidence of deliberate dishonest conduct. Prosecution for cheating the public revenue (a common law offence) carries a maximum sentence of life imprisonment. Other tax fraud offences carry maximum sentences of up to 10 years' imprisonment. HMRC also pursues confiscation orders under POCA to strip defendants of the proceeds of tax evasion.
HMRC has powers to enter and search premises under a warrant obtained from a magistrate or (in serious cases) a circuit judge. During a search, HMRC officers may seize documents, electronic devices, and other material. You have the right to legal advice and should contact a specialist solicitor before answering any questions. You do not have to answer substantive questions during a search. Legally privileged material must not be seized, and any claim of privilege should be raised immediately if investigators seek to take privileged documents.
Tax avoidance involves arranging one's affairs within the law to reduce the tax payable — it is not itself illegal, though HMRC has wide powers under the General Anti-Abuse Rule (GAAR) and various targeted anti-avoidance rules to challenge artificial arrangements. Tax evasion involves deliberately understating income or assets, making false statements to HMRC, or concealing taxable transactions in order to pay less tax than is legally due. Tax evasion is a criminal offence and, in serious cases, is treated as money laundering under POCA.
Part 3 of the Criminal Finances Act 2017 introduced two corporate offences of failing to prevent the facilitation of tax evasion — one for UK tax evasion and one for foreign tax evasion. A company or partnership commits an offence if a person associated with it criminally facilitates tax evasion while providing services for or on behalf of the company. The only defence is to show that the organisation had reasonable prevention procedures in place. HMRC has power to investigate and prosecute these offences.
HMRC investigations — whether civil or criminal — involve complex legal and procedural questions where the wrong response can have serious consequences. In COP9 cases, the decision whether to make a CDF disclosure is one of the most significant an individual can make, and requires a thorough understanding of the potential criminal exposure, the adequacy of the proposed disclosure, and the potential impact on associated individuals. In criminal cases, early specialist representation is essential to protect your rights and to develop the most effective strategy for managing the investigation.
