Tax Credit Fraud

If HMRC or another official body, such as the Department for Work and Pensions suspects that you are not eligible for the type or amount of financial relief you currently receive, it’s highly likely that you will be made the subject of a tax credit investigation. The tax credit fraud investigation process is not something that should be taken lightly, as not only might it lead to your financial support system being removed at least until enquiries have come to an end, but in more severe cases, you may also be prosecuted.

How Can DBT & Partners Help?

The tax credit fraud solicitors at DBT & Partners understand the concerns of individuals who find themselves faced with losing their financial relief. They also know that simple mistakes and a lack of clarity can lead to accusations of fraud.

Their priority is to ensure that any tax credit investigation concludes fairly, and that all of the evidence indicating their client’s innocence is properly considered. In order to avoid undue tax credit fraud penalties, we recommend that you get in touch with DBT & Partners as soon as you learn of any allegations against you.

Matters Related to Tax Credit Fraud Prosecutions

Tax credits and benefits are often considered to be part of the same system. However, benefits are usually dealt with by the Department for Work and Pensions, while tax credits are managed by HMRC. The amount for which an individual, couple or family is eligible is calculated annually and paid in either weekly or monthly amounts.

Depending on your circumstances, you may be permitted to claim working tax credits or child tax credits.

If a tax credit investigation has been launched into your affairs, it may be because:

• HMRC believe that you are claiming a type of credit for which you are not eligible.
• HMRC believe that you have provided false information in order to receive a tax credit sum that is higher than the amount you are truly due.

The two main types of tax credit fraud are “false representation for claiming benefits or tax credits” and “dishonest representation for claiming benefits or tax credits”. The first term refers to the act of providing incorrect information with the purpose of receiving credit amounts you know you are not eligible for, or failing to notify HMRC of a change to your circumstances that would affect the amount of tax credits you are able to receive, or even persuading or encouraging another person to update HMRC of a change in their life that would otherwise affect their tax credits.

The second term refers to purposeful deception and dishonesty on the part of the individual who makes a false claim or fails to notify HMRC of any change to their circumstances in order to make financial gains through receiving incorrect tax credits.

On many occasions, honest mistakes are made that prompt an investigation. In order to ensure that you do not face tax credit fraud punishment for something you did by accident, it’s vital that you get in touch with experienced tax credit fraud solicitors as soon as possible to help you build a strong defence.

If you are the subject of a tax credit fraud investigation, you may be accused of:

• Tax fraud or tax evasion
• Cheating the public revenue
• Taxation fraud related to crime or organised crime
• Making false financial statements or providing false, misleading or forged documentation
• Misrepresentation
• Deception, concealment, conspiracy or corruption

Tax Credit Fraud: Frequently Asked Questions

How is tax credit fraud investigated?

The methods used in an investigation into your tax credits may take many different forms. More often than not, it may involve HMRC, the DWP, local authorities and other official bodies sharing information about you between themselves to calculate the amounts for which you are truly eligible. You may also be invited to attend an “interview under caution”, an optional meeting where you will be questioned about your activities.

It’s important to discuss with your tax credit fraud solicitors whether it is in your best interests to attend this or not, and they will be able to accompany you to the interview if you decide to do so. The investigation will result in a decision being made regarding whether you have indeed made a false or incorrect claim, and whether or not you should tax credit fraud penalties as a result.

What constitutes tax credit fraud?

Tax credit fraud is often defined as “false representation for claiming benefits or tax credits” or “dishonest representation for claiming benefits or tax credits”

What is the maximum penalty for tax credit fraud?

You may not be prosecuted at all as the result of an investigation, but it is possible. For those who are considered to be guilty of the offence, potential tax credit fraud penalties include a civil fine of up to £2,000, which you may be asked to pay instead of facing criminal prosecution. You are able to appeal this amount.

However, tax credit fraud punishment in criminal cases may see a guilty party facing a fine of £5,000 and/or a maximum custodial sentence of three months in prison if the offence was that of false representation. Dishonest representation may also see a defendant hit with a £5,000 fine, but the possible maximum prison term for this offence may reach six months (or a year in the case of Scottish courts). In particularly severe cases, however, the perpetrator may be jailed for up to seven years and/or face an unlimited fine.

For further information about how DBT & Partners expert tax credit fraud solicitors may be able to assist you, contact us.