Tax, investigations and financial crime

Contact: Adam Craggs

Tax, investigations and financial crime

2023/2024 Annual report on AML/CTF supervision published

On 13 March 2025, HM Treasury published its annual report on the supervision of anti-money laundering and counter-terror financing (AML/CTF) for the year 202324. The report highlights the activities carried out by the supervisors, which are the FCA, HMRC, the Gambling Commission (GC), the 22 legal and accountancy Professional Body Supervisors (PBSs) and the Office for Professional Body Anti-Money Laundering Supervision (OPBAS), during the year. Supervisory activity covered by the report includes their use of enforcement action, their educational role, how they monitor compliance through a risk-based approach, and risk assessments.

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Court of Appeal confirms that compensatory payments made to settle regulatory investigations are not penalties

In ScottishPower (SCPL) Ltd and others v HMRC [2025] EWCA Civ 3, the Court of Appeal (CoA) held that payments made to consumers in settlement of regulatory investigations were not penalties and therefore were deductible for corporation tax purposes. In the CoA's view, the payments were compensatory payments made to settle regulatory investigations and were not, therefore, penalties. In reaching its decision, the CoA focused on the substance of the payments rather than their label, concluding that they were intended to remedy a contractual failure rather than to punish SPL. On this basis, all of the payments were held to be deductible for tax purposes.

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Business briefing: navigating the new US-UK trade tariffs

The Trump administration has introduced sweeping tariffs on goods imported into the United States. This move is expected to cause significant disruption to global trade, with notable consequences for UK businesses. Tariffs will vary depending on the country of origin.

A baseline 10% tariff will apply to all goods imported into the US originating from the UK, on top of existing US duties, fees and taxes on such imports. Goods originating from the EU will be subject to a 20% tariff. The tariffs will not apply to:

copper, pharmaceuticals, semiconductors and lumber
energy, energy products and other minerals not available in the US.

In addition, a separate 25% tariff has been imposed on all foreign-manufactured automobiles entering the US market, regardless of origin.

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Tax Bites: April 2025

RPC's Tax Bites collated monthly bite-sized updates from the tax world. The April edition covers:

government response to umbrella company consultation
HMRC updates its guidance on carried interest reporting
reforms to IHT reliefs for trusts
HMRC updates its Guidance on Enhanced R&D tax relief for loss-making SMEs based in Northern Ireland
tribunal allows taxpayer's appeal in R&D relief claim
High Court permits recission in EBT case enabling taxpayers to avoid IHT liability
Court of Appeal allows taxpayer's appeal and agrees the "exceptional circumstances" exemption was satisfied in statutory residence case.

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RPC's V@ update – March 2025

The most recent issue of our V@ newsletter provides readers with an update on significant VAT news from the past month. This month, the Exchequer Secretary to the Treasury outlined the government's vision for HMRC, addressing electronic invoicing and customs procedure simplification. HMRC have launched a consultation on standardising e-invoicing and increasing its adoption across UK businesses and the public sector. Additionally, HMRC has released its second estimate of the VAT gap for 202324 following the Chancellor's Parliamentary statement. V@ also offers analysis on current case law reports, with this month considering the application of the 'Reemtsma' principle proposed on a strike out application made post-Brexit, an appeal relating to VAT fraud and a potential VAT exemption in the context of medical treatment.

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Taxing Matters: the human side of tax disputes

In this episode of RPC's Taxing Matters, podcast host and Senior Associate Alexis Armitage speaks with Mark Bevington, founder of ADE Tax and a strategic tax advisor with over 30 years' experience. They delve into the human dimensions of tax disputes, contrasting them with commercial disputes while examining their emotional impact on individuals. The discussion explores how these human complexities can be effectively navigated, as well as how mediation and Alternative Dispute Resolution can help humanise the process. This conversation offers valuable insights into an often-overlooked dimension of tax disputes, drawing on Bevington's extensive experience advising on transactions, disputes, negotiations, policy and planning matters.

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Financial Crime Time update:2025 Q1

The latest edition of Financial Crime Time provides a concise overview of the current news headlines relating to financial crime and compliance. The publication aims to deliver an easily digestible, bite-sized summary of key issues that may impact your business, focusing on developments that are particularly relevant to professionals in this field.

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Revision of regulatory framework to align with growth objectives

The current UK regulatory landscape comprises over 100 bodies, with 17 key regulators employing 36,000 staff with a gross annual expenditure of £5.4bn in 2023/24. In order to drive efficiency, the government is launching a comprehensive Action Plan to overhaul the regulatory system, focusing on four key areas: simplifying the system's structure; ensuring proportionate regulation at minimum business cost; improving regulator performance and accountability; and clarifying regulators' purpose and duties.

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Tax, investigations and financial crime

Consultation on HMRC's powers regarding tax adviser non-compliance

This consultation examines the effectiveness of HMRC's current powers in addressing non-compliance facilitated by tax advisers. Aimed primarily at tax advisers, their clients, and tax and accountancy professional bodies, it seeks feedback on four potential complementary measures: expanding information powers against tax advisers; introducing stronger penalties for advisers who contribute to the tax gap; publishing details of advisers subject to HMRC sanctions; and sharing more information about tax advisers with their professional bodies. The consultation invites stakeholders to provide their perspectives on these proposed measures, which collectively aim to strengthen HMRC's ability to tackle adviser-facilitated non-compliance within the UK tax system.

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Tax, investigations and financial crime

Criminal offences and prosecutions for tax fraud

In this blog, Adam Craggs and Daniel William from RPC look at HMRC's approach to investigating and prosecuting tax fraud offences. Unlike legal tax avoidance, tax evasion constitutes a criminal offence under UK law, with dishonesty being the key element in most cases. Various tax fraud offences exist, carrying potential custodial sentences and unlimited fines. HMRC selectively prosecutes cases through its Fraud Investigation Service, particularly targeting organised criminal gangs, systematic frauds, and repeated offenders. With the government investing £1.6bn to recruit 5,000 additional compliance officers, tax fraud prosecutions are expected to increase significantly.

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Serious Fraud Office details upcoming elements of strategic vision

On 3 April 2025, the Serious Fraud Office (SFO) published its Annual Business Plan for 2025-26, outlining its strategy to become a bolder, more pragmatic organisation. The plan focuses on leveraging new tools, enhancing intelligence capabilities and strengthening domestic and international partnerships. Recent developments into stricter case discipline have already enabled the SFO to open eight new investigations. Key initiatives include implementing the new "failure to prevent fraud" offence from September, refreshing corporate engagement guidance, developing a whistleblower incentivisation scheme, and rolling out Technology Assisted Review (TAR). The SFO will continue to invest in covert operational capacity and has established a new international taskforce with Switzerland and France to combat bribery and corruption.

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Tax, investigations and financial crime

Tax Bites: May 2025

Welcome to the latest edition of RPC's Tax Bites – providing monthly bite-sized updates from the tax world.

HMRC updates its Partnership Manual reversing changes relating to the capital contribution condition under the LLP salaried members rules
HMRC updates its Guidance on paying Pillar 2 top-up taxes
HMRC updates various manuals to reflect the shift to a residence-based regime for non-UK domiciled individuals
HMRC updates its Guidance on paying landfill tax
Upper Tribunal allows company's appeal as payment to EBT was not earnings of its employee

Court of Appeal confirms that compensatory payments made to settle regulatory investigations are not penalties.

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