The general term ‘fraud’ has a wide significance,
and there is no simple definition that covers the full range of
conduct to which it may be applied. In departmental terms,
‘fraud’ means falsification with an intent to deceive,
and this may be present even as a mere conscious understatement in,
or omission from, an account. The practical effect of this is that
you may encounter degrees of fraud on a wide scale. The lesser
forms may differ only slightly from negligence. Those at the other
end of the scale may involve a deliberate and planned attempt to
deceive and cheat HMRC by the omission, manipulation or invention
of figures, or other records.
As far as accounts are concerned, taxpayers must certify an
account as being correct and complete to the best of their
knowledge. The taxpayer is clearly under a duty to take the trouble
to read both the account and the accompanying notes. If items are
knowingly omitted or the value of the property understated by more
than can be accounted for by genuine errors or honest
misunderstanding then the taxpayer may well be guilty of fraud.
Broadly speaking it cannot be said that (except in the case of a
very ignorant or simple minded person) the taxpayer could have had
an honest belief in the truth and accuracy of the account.
If you suspect fraud you must follow the guidance for dealing
with suspected fraud (
IHTM36293).
