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News & Portal: Money Laundering

HMRC ramps up measures to tackle suspected criminal activity

12 June 2020  
Posted by: AMLCC
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By AMLCC

HMRC is ramping up its use of new Account Freezing Orders (AFOs) and Forfeiture Orders (FOs) to tackle suspected criminal behaviour.

Research by City law firm RPC shows that 166 orders to freeze accounts were issued by HMRC in 2019/20, up 177% from 60 the previous year. In addition, the amount forfeited and the number of forfeiture applications have increased fourfold on the previous year*.

AFOs and FOs, along with a raft of controversial investigative powers included in the Criminal Finances Act 2017, were introduced in 2018. Regulatory bodies, including HMRC, now have the power to apply for AFOs to prevent money being withdrawn from or deposited into accounts linked to suspected criminal activity.

FOs (issued by the Magistrates’ Court) and Forfeiture Notices (issued by regulatory bodies, including HMRC) are used to directly seize money that is suspected of having been obtained by unlawful conduct. Before these powers came into effect, HMRC had few options available to it for seizing money directly from bank accounts without first having to charge the person suspected of wrongdoing.

Also, these powers allow HMRC to apply to the court to freeze and forfeit bank accounts without having to bring an allegation of criminal wrongdoing to trial.

RPC says that it expects AFOs and FOs to be used by HMRC to seize money in accounts of suspected fraudsters relating to the Government’s £350bn coronavirus stimulus package. Businesses suspected of abusing the Coronavirus Job Retention Scheme could have accounts frozen for up to two years.

Commenting on the figures, Adam Craggs, Partner and Head of Tax Disputes at RPC says: “HMRC now has extensive powers to seize assets under investigation and it appears to be looking at every opportunity to exercise those powers.

“Freezing Orders are easy to obtain. The authorities only need to show the Magistrate that they have reasonable grounds to suspect that money has been obtained by unlawful conduct.”


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