HCOS4075 - Post detection audit and assessment: introduction
Purpose
Guidance on the law, policy and assurance techniques concerning Post Detection Audit and Assessment for managers and oils staff in ISBC and Large Business.
A set of Post Detection Audit and Assessment Case Studies give detailed guidance on calculating mileage and fuel usage and are provided at HCOS5650.
Other sections of this publication provide guidance on the law, policy and assurance techniques concerning the:
General principle
Under the UK Oils Strategy, Fraud Investigation Service (FIS), and especially their Road Fuel Testing Units (RFTUs), will target commercial scale fraud, eg misuse of rebated oil by hauliers, taxis, bus and coach companies. When detections are made, the case will be referred to ISBC (or, if appropriate, LB) to identify the scale of the revenue loss and make an assessment of the rebate of duty due.
This action serves two purposes:
- the revenue evaded is recovered, and
- as commercial users of oil become aware that HMRC are likely to make an assessment for duty if they are caught misusing rebated oil, the financial incentive to do so will be diminished and fraud will reduce.
Successful completion of these cases depends on cooperation and communication between FIS and ISBC. Officers also need to be mindful of adopting a collaborative approach in these cases and considering eg VAT or direct tax implications.
Roles and responsibilities
FIS
- Make the initial detection and carry out the required procedures.
- Establish the legislation breached.
- Where practical, visit the home base of the commercial entity involved to check for further breaches and to check vehicles for misuse.
- Seize vehicles as appropriate in line with the FIS sanctions policy.
- Take details of all the offender’s vehicles.
- Arrange and undertake all interviews of suspects involved in fraud.
- Wherever possible take up all available records relating to the use of oil by the business.
- Arrange for restoration of vehicles seized, where appropriate.
- Complete all appropriate paperwork in relation to seizure and return of vehicles.
- Scan case documents, complete the standard referral report and file copies of all pertinent information and records in the RIS-RFTU shared CAF.
- Include in referral report whether the case should be referred to the Traffic Commissioners for action against the operator’s license.
- Ensure that fuel samples are retained by Queen’s Warehouse for the duration of any appeal, following notification to them of appeals cases by ISBC / LBS.
- Arrange the return of any vehicles still held after settlement in line with the sanctions policy.
- Liaise with Investigation on relevant cases after any arrears are established.
- Complete case files and reports including CENTAUR.
- Liaise with ISBC CITEX and update Item Management entry on CENTAUR regarding retention/disposal of any samples.
- Account for all monies taken up in restoration cases.
Fraud Investigation Service (FIS)
Individual & Small Business Compliance (ISBC)
Post detection referrals overview
The Service Level Agreement (SLA) between all stakeholders sets out the procedures to be followed and timescales involved. A new version is being produced in 2018. A copy of the SLA is available from the Oils Portfolio holder in ISBC.
FIS are to notify RIS of a detected offence and FIS will then establish the offence (or otherwise) following the SLA procedures.
If the offence is established, then FIS will pass all the relevant paperwork relating to a commercial detection to RIS. This will include a full set ofscanned documents including copies of notebook interviews and a case summary, and will also include a standard referral Where three or more vehicles are suspected to be involved in the misuse case, this information will be simultaneously supplied to the regional ISBC contact, to speed up the process of following up the original detection.
Note: Any cases lacking full information will be returned to FIS by RIS.
Where an offence has been established, RIS will add value to the information supplied by FIS, determine the ISBC follow up action, and select the case for audit via Caseflow and note the RIS spreadsheet accordingly within 48 hours of referral.
ISBC audit teams will then carry out the Post Detection Audit and raise any assessment needed. They will then notify the results to RIS via Caseflow .
RIS will then advise FIS of the outcome of audits each month by filing an updated copy of the case spreadsheet in the RIS-RFTU shared CAF.