Recommendation 30

We asked DWP and HMRC about the different departmental responses to similar fraudulent actions, such as concealment of earnings. HMRC told us it has a policy of using criminal investigations in only the most serious cases, where it is the necessary response and where it will have a real deterrent effect, or where the taxpayer has taken certain actions that only criminal investigation will enable HMRC to get to the bottom of, such as when information is beyond the reach of its civil powers.88 HMRC explained it focuses instead on disrupting criminal activity to make it unprofitable.89 DWP explained that in 2017 it increased the threshold for fraud that it would pursue through the criminal process as opposed to the civil process and it increasingly uses administrative penalties, rather than full-scale prosecution, because it wants to focus criminal investigations on serious organised fraud.90 DWP told us one of the big investments DWP has been making is to make it easier for people to inform the department of a change, for example through online prompts in systems which are making some difference in sweeping up errors caused by a failure to notify of a change of circumstance.91