HMRC’s Fraud Investigation Service (FIS): What You NEED to Know
If HMRC’s Fraud Investigation Service (FIS) has contacted you, stop everything and read this!
This is HMRC’s elite tax fraud unit—they don’t investigate minor mistakes or small underpayments. They go after big cases, serious tax fraud, and aggressive tax avoidance. If they’re on your case, you need to know what they do, how they operate, and how to protect yourself.
Here’s the no-nonsense guide to HMRC’s Fraud Investigation Service (FIS) and what to do if they come knocking.
What is the Fraud Investigation Service (FIS)?
FIS is HMRC’s top-tier tax investigation unit. These aren’t your everyday tax inspectors—they’re highly trained specialists focused on:
- ✔️ Criminal prosecutions for serious tax fraud
- ✔️ Aggressive tax avoidance cases
- ✔️ Investigating offshore accounts & hidden assets
- ✔️ UK tax fraud (without offshore links)
- ✔️ Task force raids on businesses
HMRC doesn’t waste time on minor cases—if FIS is involved, they think there’s serious tax evasion or fraud.
Key fact: If you get a letter from FIS, you must take it seriously. Ignoring them can cost you dearly.
Who are the FIS teams & what do they do?
FIS is split into different units, each targeting a specific type of tax fraud:
1. FIS Prosecutions
- This is where things get serious. If FIS believes they can prove tax fraud in court, they’ll push for prosecution.
- Around 600 investigators work full-time on tax fraud cases.
- Most cases are civil (fines & settlements), but political pressure means more prosecutions.
- In 2018, HMRC prosecuted over 1,000 people for tax evasion.
🚨 If you’re under criminal investigation, you NEED legal representation. Many people could have avoided prosecution if they’d got professional help early on.
2. Offshore Tax Investigations
Do you have overseas accounts, trusts, or assets? HMRC knows about them.
- Since September 2018, a global agreement means financial institutions automatically report offshore accounts to tax authorities.
- HMRC’s Risk & Intelligence team sends letters demanding explanations.
- If they suspect fraud, they’ll escalate to a full-blown investigation.
How to tell if you’re being investigated for offshore tax?
Look at the HMRC return address:
- BX postcodes = Offshore tax teams
- Bootle addresses = UK tax teams
3. UK Tax Fraud Investigations
You don’t need offshore assets to be investigated. If HMRC suspects fraud, they’ll act.
- Many high-value fraud cases involve UK-based businesses & individuals.
- VAT fraud is a common target—it’s transactional, making it easier to prove in court.
- HMRC’s dedicated UK tax fraud unit is well-funded & aggressive.
4. Task Forces: The ‘Dawn Raid’ Specialists
- ✔️ Corporation Tax
- ✔️ Income Tax
- ✔️ VAT
- ✔️ National Minimum Wage compliance
If they show up at your business, they mean business.
What happens next?
- Inspectors can stay on-site for days or remove records for analysis.
- They often target whole industries in a geographical area.
- These raids have triggered many Contractual Disclosure Facility (CDF) cases—the first step in a serious tax fraud investigation.
How does FIS investigate tax fraud?
HMRC doesn’t just guess who’s committing tax fraud. They use:
- Financial institution data (including offshore accounts)
- Land Registry records (property ownership & transactions)
- Data mining software to track suspicious activity
- AI-driven risk assessment models
If you’re on their radar, it’s because they already have evidence.
What are Code of Practice 8 & 9?
If you’ve received a letter referencing Code of Practice 8 or 9, PAY ATTENTION.
Code of Practice 8 (COP8) = Tax avoidance
Not fraud (yet), but serious enough to trigger an investigation. HMRC thinks you’ve used aggressive tax schemes.
Code of Practice 9 (COP9) = Suspected tax fraud
This is serious. If you get a COP9 letter, HMRC already suspects fraud. You’re being given ONE CHANCE to disclose everything.
Ignore this at your peril! If you don’t fully cooperate, HMRC can prosecute.
BIG change: HMRC is using COP8 more often for offshore matters. If you have non-UK income, don’t assume you’re safe.
What should you do if you’re contacted by FIS?
- DO NOT IGNORE HMRC! This isn’t a normal tax enquiry—it’s a fraud investigation.
- ✔️ Get professional advice IMMEDIATELY.
- ✔️ DO NOT destroy or alter any records. That could be a criminal offence.
- ✔️ If invited to a meeting, prepare properly. They already have evidence—don’t try to bluff.
- ✔️ Engage early—negotiating now is easier than appealing later.
- Pro Tip: The sooner you act, the better your chances of avoiding prosecution.
Final Thought: If FIS contacts you, don’t panic—but don’t delay.
- If you’ve received a letter from HMRC’s Fraud Investigation Service, act NOW.
- Ignoring it or lying will only make things worse.
- Get expert help, be honest, and take control of the situation before HMRC does it for you.
HMRC’s Fraud Investigation Service is NOT a department you want to mess with. Be smart, be informed, and act fast.
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