• HMRC receive information from an informant who is credible
HMRC do not assume that all the information they receive is accurate. Some of it is malicious. But they will follow up on credible sources.
• An investigation into one taxpayer implicates others
This is very common and a huge source of information for HMRC. If you have dealt with someone dodgy, it is quite possible that a trail may lead back to you.
• HMRC receive information from overseas
In the modern world the exchange of information between government authorities across borders is increasing all the time.
• A professional person (a “trusted adviser” such as an accountant or solicitor) is suspected of involvement
Prosecution is always a possible outcome if a trusted adviser is involved in a tax offence. “Bad apple” syndrome can lead HMRC to look at other clients.
• Suspicion of forgery, falsification of documents, inappropriate backdating
This might include keeping two sets of business records and if HMRC suspects a number of people may have conspired to evade tax there is an enhanced risk of prosecution
• A previous offender is suspected of further irregularities
Prosecution for a first offence is very rare. But someone who has previously signed a certificate of full disclosure that appears to be false is at much greater risk.
• Anything that seems to involve an unnecessary or inappropriate offshore element
HMRC have an in-built suspicion of all things offshore. Some structures are perfectly legitimate but proving this can be challenging.
• Suspicion that an aggressive tax avoidance scheme has been misrepresented
It appears that HMRC dislike tax avoidance (which is legal) as much as they dislike evasion (which is not). Avoidance schemes are easier to spot and HMRC do not mind blurring the distinction.
• Lying to HMRC
This is not a good idea.