Money laundering is basically dealing with money or property obtained or derived from criminal conduct, where the person concerned knows or suspects that it is criminal property.
From a tax perspective, the important thing to note is that ‘criminal property’ includes money and property gained through tax fraud.
So, if a person has money that they should have paid over to HMRC but have kept hold of it through tax fraud – that is a money laundering offence. That will also be true of someone who has money or property arising from some other person’s or company’s tax fraud, if they know or suspect that the money comes from tax fraud.
The offences are quite technical and they are currently in sections 327, 328 and 329 of the Proceeds of Crime Act 2002. However, the headline point is that someone who deals with the proceeds of their own or another’s tax fraud and who knows or suspects this to be the case can be prosecuted for money laundering.
If you are being investigated by HMRC in connection with income tax fraud or money laundering offences and penalties, please contact Patrick Cannon for an initial discussion or advice.