HMRC fails to meet HMIC targets on tax evasion proceeds

HM Inspectorate of Constabulary (HMIC) has published a report after a follow-up inspection visit to assess how well HMRC had implemented 15 recommendations made by HMIC in respect of the recovery of the proceeds of crime from tax evasion and benefit fraud.

The 15 recommendations were made after HMIC’s inspection of the tax authority’s performance in addressing the recovery of the proceeds of crime from tax and duty evasion and benefit fraud in 2009–10.

In its revisit inspection in late 2013, HMIC found that HMRC has been slow to respond and had ‘failed to adhere to and implement the 2011 report’s recommendations in a way HMIC would have expected’.

The report says: ‘Although HMRC had developed an action plan, there was a lack of effective governance to ensure that sufficient priority and focus was given to addressing these recommendations.’

Only three of the 15 recommendations had been put into action and three other recommendations were only partially discharged, contrary to HMRC’s March 2013 action plan which stated that all recommendations had been ‘closed’.

The report highlighted HMRC’s failure to refresh the Criminal Finances Strategic Framework or replace it with a new financial strategy (recommendation 1), which had a knock-on effect on the delivery of eight other recommendations. These related to development of strategic assessments to address financial intelligence gaps; development of performance measures; development of intelligence to support money laundering investigations; creation of a best practice model for the completion of financial profiles; the maintenance of detailed case financial plans; recording of positive and negative decisions; recovery of debt as a result of tax evasion and the dissemination of best practice.

HMIC found that ‘if these recommendations had been pursued with vigour, they would have raised the awareness of investigators about the potential benefits of pursuing money laundering investigations and using allied financial investigation tools’.

They would also have assisted in addressing the inconsistent approach to criminal finances in case development and the investigation of criminal offences and contributed to placing criminal finances at the centre of criminal investigations.

The full report is available at

Diane Tan |Content manager - current awareness, CCH

Diane Tan is content manager, current awareness at CCH, Wolters Kluwer UK

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