HMRC’s OCW unit opened 25 tax fraud investigations last year

HMRC’s Offshore, Corporate and Wealthy (OCW) unit opened criminal investigations into 25 wealthy individuals over suspected serious criminal tax frauds last year, according to findings from Pinsent Masons. 

The OCW unit, which comprises roughly 500 staff, has a wide range of criminal and civil powers at its disposal, yet reserves criminal processes for its most “serious” investigations. 

OCW is part of HMRC’s Fraud Investigation Service (FIS), which was set up in the wake of the Panama Papers leak in 2016 with a brief to target deliberate, high-value tax evasion, fraud and money laundering. Wealthy individuals, which are those earning over £200k each year, are a major part of OWCs focus.

Over the past decade HMRC’s approach to economic crime enforcement has evolved to focus on the largest and most complex cases of tax fraud. The data reveals that between 2009 and 2010, HMRC undertook just 165 prosecutions, protecting approximately £150m in tax revenue, while by 2019 and 2020, the number of prosecutions had risen almost fourfold to 573 and had protected approximately £5bn in revenue.

Investigations by OCW include that of BHS owner Dominic Chappell, who was sentenced to six years of imprisonment in 2020 for tax evasion, and the current investigation into Bernie Ecclestone, who is due to stand trial later this year following a “complex and worldwide” criminal investigation.

Andrew Sackey, partner at Pinsent Masons and a former head of OCW, says that the unit is playing a central role in FIS’ strategic change to enforce what HMRC considers to be “the most impactful of tax investigations”.

Sackey said: “As the name implies, OCW is the spearhead for HMRC’s drive to tackle the most complex and impactful cases of tax evasion and fraud. It is aiming to secure prosecutions against corporates or wealthy individuals whose deliberate actions are believed to have defrauded the public purse of hundreds of millions of pounds. 

“The Treasury consistently provides HMRC with significant funds and resources each year to investigate a range of serious non-compliance, including the suspected conduct of high net worth individuals’. If the amount of tax revenue it protects through these investigations keeps rising, the Government is likely to continue to invest in this high-end form of tax enforcement.”

He added: “HMRC and its counterparts overseas are making it increasingly likely that tax irregularities, evasion and fraud will be detected. As financial institutions are increasingly brought into that fold as trusted partners, that process is only going to accelerate.”