HM Revenue and Customs (HMRC) collected £5.47 billion in extra tax in 2018 through fraud investigations – approximately seven per cent more than the amount collected the previous year (£300 million).
It is thought that the increase can be attributed largely to a 13 per cent rise in civil investigations.
HMRC’s Fraud Investigation Service (FIS) has been in place since 2015. It was initially set up to tackle only the highest-value cases of suspected tax evasion or fraud, but the Revenue is increasingly upscaling its activities in various areas.
The increase in FIS investigations comes in line with added political pressure to increase the number of successful tax prosecutions in both the UK and abroad, commentators have said.
This summer, HMRC published a consultation document, focusing on changes that could simplify the process of accessing taxpayer information through third parties, such as accountants, retailers, and social media platforms.
The report suggested that the removal of HMRC having to go through a tribunal before securing this third-party information would help with increasing the efficiency of the process, but critics have raised concerns that these proposals are somewhat invasive.
The FIS has certainly proven to be effective since it has been in effect.
One high-profile case involving the FIS in the past year focused on an organised crime group in Glasgow, which was accused of benefit and mortgage fraud, as well as money laundering, all worth up to £4.6 million.
The FIS seems to be a very effective weapon wielded by HMRC, sending out a very strong message.
