Tax Investigations Lack a Deterrence Effect – Bloomberg Tax Article – Tax Evasion

UK’s Serious Civil Tax Investigations Lack a Deterrence Effect

Tax Evasion and HMRC’s Fraud Investigation Service

In this article for Bloomberg Tax we covered how HMRC’s Fraud Investigation Service, with some 5,500 new investigative officers promised in the UK’s recent budgets and the June Spending Review, are still expected to “do more, with more” to increase the deterrence effect of their most serious civil tax investigations.

Anecdotally, it seems the chains have still not come off in the case of HMRC’s most aggressive tax investigations, carried out by the Fraud Investigation Service, or FIS, where large amounts of tax are believed to be at risk and/or suspicions of tax fraud are alleged; predominantly working on tax evasion cases.

Despite an impressive responsibility, staff numbers have stayed stubbornly close to or below 5,000 across the country. Anecdotal evidence shows that the public is not afraid of FIS civil investigations and is seldom aware that a person has been subject to one—so the low number of investigations has a poor deterrence effect.

Over the 2024-2025 period, only 450 new such investigations were commenced (down from 480 in the 2023-2024 period), although FIS still managed to secure almost £190 million ($257 million) in revenue.

Here is the link to the full article at Bloomberg Tax; read on to learn more.