Is there a time limit for prosecuting tax fraud

In England and Wales, most serious tax fraud can be prosecuted however long ago it happened. The six month limit in section 127 of the Magistrates’ Courts Act 1980 applies only to summary proceedings and expressly does not apply to indictable offences, which include offences triable either way such as fraudulent evasion of income tax and fraud. The main exception is VAT and customs offences, where section 146A of the Customs and Excise Management Act 1979 sets a 20 year limit for indictable offences and a 3 year outer limit for summary ones.

Why do some offences have a time limit and others do not?

Section 127(1) of the Magistrates’ Courts Act 1980 says that, unless an enactment expressly provides otherwise, a magistrates’ court must not try an information unless it was laid within 6 months from the time the offence was committed. Section 127(2) then says that neither that rule nor any other enactment imposing a time limit on summary proceedings applies to an indictable offence.

The Interpretation Act 1978 defines an indictable offence, for England and Wales, as one that is triable on indictment, whether exclusively so or triable either way. A summary offence is one triable only summarily. So the question to ask is not how serious the case is, but whether the offence charged can be tried in the Crown Court. If it can, the general six month rule falls away. This page describes the position in England and Wales; section 127 extends to England and Wales only.

Which tax offences can be tried in the Crown Court?

• Fraudulent evasion of income tax. Section 106A of the Taxes Management Act 1970 makes it an offence to be knowingly concerned in the fraudulent evasion of income tax by yourself or anyone else. It carries up to 14 years’ imprisonment on indictment. Section 106A(4) says it does not apply to things done or omitted before 1 January 2001.
• Fraud. Section 1 of the Fraud Act 2006 covers fraud by false representation, by failing to disclose information and by abuse of position, with a maximum of 10 years on indictment.
• False accounting. Section 17 of the Theft Act 1968 covers dishonestly destroying, concealing or falsifying accounts or records, or using misleading ones, with up to 7 years on indictment.
• Cheating the public revenue. Section 32(1)(a) of the Theft Act 1968 abolished the common law offence of cheating except as regards offences relating to the public revenue, so cheating the revenue survives as a common law offence. Its relationship with the statutory offences is covered in cheating the public revenue or fraudulent evasion.

Because all of these are indictable, none of them is subject to the section 127 limit. That is why conduct from many years earlier can still lead to charges if the evidence is available.

What time limits apply to VAT and customs offences?

VAT is different. Section 72 of the Value Added Tax Act 1994 creates the VAT evasion offences, including being knowingly concerned in the fraudulent evasion of VAT, with up to 14 years on indictment. Section 72(12) applies sections 145 to 155 of the Customs and Excise Management Act 1979 to VAT offences, and section 146A of that Act sets its own time limits:

Type of proceedings	Time limit under section 146A
Indictable offence	Must be commenced within 20 years beginning with the day the offence was committed
Summary offence	Must be commenced within 3 years of the offence and, within that, within 6 months of the date sufficient evidence came to the prosecuting authority’s knowledge

Under section 146A(4), a certificate from the prosecuting authority about when that evidence came to its knowledge is conclusive. Section 146A applies to proceedings for offences under the customs and excise Acts, and to VAT offences through section 72(12). More on the VAT offences themselves is in the VAT evasion offence.

What about the offshore strict liability offences?

Sections 106B to 106D TMA 1970 create offences of failing to notify chargeability, failing to deliver a return and making an inaccurate return where offshore income, assets or activities are involved and the tax exceeds a threshold amount, which section 106F(2) says cannot be set below £25,000. These offences do not require dishonesty, although there are defences of reasonable excuse for the first two and reasonable care for the third. Section 106E excludes trustees and personal representatives acting in those capacities.

Unlike the fraud offences, these are summary only: section 106G provides penalties on summary conviction, with up to 51 weeks’ imprisonment in England and Wales. Because they cannot be tried on indictment, the six month rule in section 127(1) of the Magistrates’ Courts Act 1980 is the starting point, subject to any express provision in another enactment.

Who decides whether to prosecute old conduct?

Not HMRC alone. HMRC’s published criminal investigation policy says HMRC is not responsible for deciding whether a case will be prosecuted; that decision is made by the independent prosecution authorities, which in England and Wales is the Crown Prosecution Service. HMRC’s policy is to deal with fraud through the civil procedures in Code of Practice 9 wherever appropriate, reserving criminal investigation for cases where it needs to send a strong deterrent message or where only a criminal sanction is appropriate.

The policy lists examples of cases where HMRC will generally consider criminal investigation, including organised attacks on the tax system, people in positions of trust, materially false statements or documents provided during a civil investigation, the use of false or forged documents, and repeat offending. One factor HMRC considers is whether the taxpayer has made a complete and unprompted disclosure. See criminal tax investigations and whether COP9 protects you from prosecution.

How does this fit with HMRC’s civil time limits?

The criminal and civil routes run separately. Even where HMRC does not prosecute, it can make a civil assessment for income tax or Capital Gains Tax up to 20 years after the end of the tax year where the loss was brought about deliberately, under section 36(1A) TMA 1970. For VAT, section 77(4) of the VAT Act 1994 allows assessments up to 20 years after the end of the accounting period in a case of deliberate loss. So the absence of a prosecution time limit sits alongside long civil limits, rather than replacing them. Lying in response to a civil enquiry about old years can itself be one of the triggers HMRC’s policy names for moving to a criminal investigation.

How might the limits apply to old conduct?

Illustration only. In 2026, an investigation uncovers two schemes run by the same trader in 2005: understated profits on income tax returns, and false VAT returns. The income tax conduct can be charged as fraudulent evasion of income tax under section 106A, fraud or cheating the revenue, and no statutory time limit stops a Crown Court prosecution. The VAT offences under section 72 are subject to section 146A, and the 20 year period for indictable offences committed in 2005 had ended by the start of 2026. On its wording, section 146A covers offences under the customs and excise Acts and VAT offences under section 72; it does not mention common law offences such as cheating.

What are the common misunderstandings?

• Believing there is a general limit on prosecuting tax fraud after a set number of years. For indictable income tax and fraud offences in England and Wales, there is not.
• Assuming the 4, 6 and 20 year civil assessment limits also limit prosecution. They govern HMRC’s assessments, not criminal charges.
• Treating the six month magistrates’ rule as relevant to serious fraud. It applies only to summary proceedings.
• Forgetting that VAT offences have their own 20 year and 3 year limits under section 146A.
• Assuming HMRC decides who is prosecuted. The decision belongs to the prosecuting authority.

If HMRC opens a check into your return, tax investigation insurance pays your accountant’s fees. Solar Protect cover pays up to £100,000 with no excess; it never pays tax, interest or penalties. Read how our cover works or get a quote.

Related Accountapedia entries

• Is there a time limit on HMRC collecting a debt
• Is there VAT on cryptoassets
• What is HMRC’s Fraud Investigation Service
• The 12 year time limit for offshore tax
• Is there a minimum share capital for a private company

Sources

• legislation.gov.uk: Act 1980 c. 43, section 127
• legislation.gov.uk: Act 1978 c. 30, schedule 1
• legislation.gov.uk: Act 1970 c. 9, section 106A
• legislation.gov.uk: Act 2006 c. 35, section 1
• legislation.gov.uk: Act 1968 c. 60, section 17
• legislation.gov.uk: Act 1968 c. 60, section 32
• legislation.gov.uk: Act 1994 c. 23, section 72
• legislation.gov.uk: Act 1994 c. 23, section 96
• legislation.gov.uk: Act 1979 c. 2, section 146A
• legislation.gov.uk: Act 1970 c. 9, section 106B

Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 24 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.