UK Law and Practice Contributed by: Russell Warren and Michael Langan, King & Spalding LLP
6.3 Interaction Between Tax and Criminal Procedures HMRC will initially carry out an information-gathering exercise in instances of tax fraud, and has various statutory tools to assist with information gathering, such as production orders which compel various third parties (eg, banks) to provide information and docu - ments. HMRC will then prepare a file for the Crown Prosecution Service (CPS, for domestic tax evasion) or the Serious Fraud Office/National Crime Agency (for foreign tax offences) which summarises all of its allegations and provides all the evidence gathered. There are statutory provisions within the Economic Crime and Corporate Transparency Act 2023 which provide for co-operation in the information sharing and investigation of tax fraud between HMRC and the CPS. The final decision to bring a prosecution rests with the CPS or, where applicable, the Serious Fraud Office. 7. Administrative Co-Operation 7.1 Legal Framework for Administrative Co- Operation The UK is party to a wide range of measures aimed at facilitating co-operation in tax matters with other jurisdictions. These include exchange of informa - tion provisions in double tax treaties, tax information and exchange agreements with many jurisdictions (in line with the OECD Model Convention), the CRS and FATCA. 7.2 Exchange of Information Clauses in Tax Agreements The UK has extensive agreements and provisions which address the exchange of information with oth - er jurisdictions. These include automatic exchange of pre-defined data, through the CRS and FATCA regimes. Double tax treaties, tax information exchange agreements and the OECD Multilateral Convention also provide for spontaneous exchange of informa - tion. In addition, UK double tax treaties and the CRS provide for the sharing of information on request.
• Arrest, without a warrant, anyone: (a) who is about to commit a tax offence; (b) who is in the act of committing a tax offence; (c) whom the HMRC officer has reasonable grounds to suspect might be about to commit a tax offence; and (d) whom the officer has reasonable grounds to suspect is in the process of committing a tax offence. • Search and enter premises to make an arrest. Also see 5.2 Anti-Avoidance Mechanisms . The UK has a wide range of domestic legislation which imposes penalties on cross-border tax avoidance, such as the transfer pricing legislation in the Taxa - tion (International and Other Provisions) Act 2010, the Taxation (Cross-border) Trade Act 2018, as well as more general provisions such as the GAAR. There is also an extensive framework governing the reporting of cross-border transactions. This includes the UK’s Mandatory Disclosure Rules (which replace DAC6) as well as international law incorporated into UK law, such as the CRS and reporting provisions within dou - ble tax treaties. HMRC is responsible for imposing and enforcing sanctions in connection with cross-border transactions and for reporting any non-compliance. 6.2 Criminal Penalties There is a broad array of penalties for tax fraud and evasion in the UK, ranging from fines (which can be unlimited) to a prison sentence of up to life in the most serious cases. The Criminal Finances Act 2017 also makes businesses (wherever located, in respect of facilitating UK tax evasion, and companies with a UK connection, in respect of the facilitation of non-UK tax evasion) criminally liable for failure to prevent their employees or any person associated with them from facilitating tax evasion. While the offence is one of strict liability, there is a defence where the business has reasonable prevention measures in place. 6. Penalties and Sanctions 6.1 Tax Penalties
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