Fraudulent Conduct to Obtain Tax Credits

Date Updated: January 2012

Title: Revenue Offences

Offence: Fraudulent Conduct to Obtain Tax Credits

Legislation: Section 35 of the Tax Credits Act 2002

Commencement Date: 1 August 2002 (by virtue of The Tax Credits Act 2002 (Commencement No.1) Order 2002 (2002 No.1727)

Mode of Trial: Either Way

Statutory Limitations & Maximum Penalty: 7 years imprisonment

Sentencing Range: Fine to 7 years imprisonment

Aggravating and Mitigating Factors

• Seriousness and Aggravating factors:
• The planning of an offence
• High level of profit from the offending.
• Offenders operating in groups and gangs
• 'Professional offending'
• An attempt to conceal or dispose of evidence
• Offending carried out over a significant period of time
• Use of another persons identity
• Abuse of position of trust

Mitigating Factors

• Peripheral involvement
• Misleading or incomplete advice
• Mental illness or disability of the defendant
• Youth or age, where it affects the responsibility of the individual defendant
• Behaviour not fraudulent from the outset
• Legitimate entitlement to part or all of the amount claimed
• Voluntary cessation of offending
• Complete and unprompted disclosure of the extent of the fraud
• Voluntary restitution
• Financial Pressure

Relevant Sentencing Guidelines (If Any)

Guidelines for Sentencing Social Security Fraud including Tax Credit Fraud Under S 35 Tax Credits Act 2002

Amount obtained or intended to be obtained

Note: Where the actual amount is greater or smaller than the figure on which the starting point is   based, that is likely to be one of the factors that will move the sentence within the range

Nature of offence: Fraudulent from the outset, professionally planned and either fraud carried out over a significant period of time or multiple frauds 

• £500,000 or more (Starting point based on: £750,000) - Starting point: 5 years custody. Range: 4 - 7 years custody 
• £100,000 or more and less than £500,000 (Starting point based on: £300,000) - Starting Point: 4 years custody. Range: 3 - 5 years custody 
• £20,000 or more and less than £100,000 (Starting point based on: £60,000) - Starting point: 2 years custody. Range: 18 months - 3 years custody  

Nature of offence: Fraudulent from the outset and either fraud carried out over a significant period of time or multiple frauds 

• £500,000 or more (Starting point based on: £750,000) - Starting point: 4 years custody. Range: 3 - 7 years custody 
• £100,000 or more and less than £500,000 (Starting point based on: £300,000) - Starting point: 3 years custody. Range: 2 - 4 years custody 
• £20,000 or more and less than £100,000 (Starting point based on: £60,000) - Starting point: 15 months custody. Range: 18 weeks - 30 months custody 
• £5,000 or more and less than £20,000 (Starting point based on: £12,500) - Starting point: 12 weeks custody. Range: Community order (HIGH) -12 months custody 
• Less than £5,000 (Starting point based on: £2,500) - Starting point: Community order (HIGH). Range: Community order (LOW) - 6 weeks custody

Nature of offence: Not fraudulent from the outset and either fraud carried out over a significant period of time or multiple frauds 

• £500,000 or more (Starting point based on: £750,000) - Starting point: 3 years custody. Range: 2 - 6 years custody 
• £100,000 or more and less than £500,000 (Starting point based on: £300,000) - Starting point: 2 years custody. Range: 12 months - 3 years custody
• £20,000 or more and less than £100,000 (Starting point based on: £60,000) - Starting point: 36 weeks custody. Range: 12 weeks - 18 months custody 
• £5,000 or more and less than £20,000 (Starting point based on: £12,500) - Starting point: 6 weeks custody. Range: Community order (MEDIUM) - 26 weeks custody 
• Less than £5,000 (Starting point based on: £2,500) - Starting point: Community order (MEDIUM). Range: Fine - Community order (HIGH)

Nature of offence: Single fraudulent transaction, fraudulent from the outset  

• £20,000 or more and less than £100,000 (Starting point based on: £60,000) - Starting point: 26 weeks custody. Range: 6 weeks - 12 months custody 
• £5,000 or more and less than £20,000 (Starting point based on: £12,500) - Starting point: Community order (HIGH). Range: Fine - 18 weeks custody 
• Less than £5,000 (Starting point based on: £2,500) - Starting point: Community order (LOW). Range: Fine - Community order (MEDIUM)

Nature of offence: Single fraudulent transaction, not fraudulent from the outset 

• £20,000 or more and less than £100,000 (Starting point based on: £60,000) - Starting point:12 weeks custody. Range: Community order (MEDIUM) - 36 weeks custody 
• £5,000 or more and less than £20,000 (Starting point based on: £12,500) - Starting point: Community order (MEDIUM). Range: Fine - 6 weeks custody 
• Less than £5,000 (Starting point based on: £2,500) - Starting point: Fine. Range: Fine - Community order (LOW)

The Council considered it unlikely that more than £100,000 could be obtained in a benefit fraud, unless the offence was professionally planned and either carried out over a significant period of time or through multiple frauds.

The presence of one or more aggravating factors may indicate a more severe sentence within the suggested range while the presence of one or more mitigating factors may indicate a less severe sentence within the suggested range.
The presence of aggravating or mitigating factors of exceptional significance may indicate that the case should move to a higher or lower level of seriousness.

Relevant Sentencing Case Law

There is no specific sentencing case law for tax credit fraud cases and although an analogy may be drawn with social security fraud sentencing case law  the Court of Appeal has indicated in R v Tongue (Ross) [2007] EWCA Crim 561 that "once guidelines have been issued it should be the exception rather than the rule to cite previous cases".

Ancillary Orders:

• Confiscation Orders
• Compensation Orders

Consider also:

• Deportation

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