HomeFWJ TakeawayTax disputesAccount Freezing Orders – latest trends and anaylsis

This industry leading insight shows how HMRC are increasingly using Account Freezing Orders to recover unpaid tax. Our team regularly gets these orders withdrawn. Call for a free consultation today.

Introduction

At Francis Wilks & Jones, our tax dispute team specialises in defending companies against HMRC’s most stringent measures, particularly Account Freezing Orders (AFOs).

These orders can have a devastating impact on a company’s operations, freezing bank accounts and restricting access to funds. Our team regularly defends companies against these types of claims and can work with you to get your company bank accounts unfrozen.

Recent Freedom of information request to HMRC

Through a recent Freedom of Information Act (FOIA) request, we have obtained exclusive insights into HM Revenue & Customs practices and priorities. Additionally, data from the Government’s “Asset Recovery Statistical Bulletin” provides further context to the trends in asset recovery. This article provides a detailed up to date analysis of both data sources as well as offering offering practical advice for companies facing AFOs.

Key Findings from HMRC Data

1. Rise in Account Freezing Orders

The data reveals a significant increase in the issuing of Account Freezing Orders (or AFO’s) by HMRC over the past five years. The number of orders has risen from 67 in 2018/19 to 142 in 2022/23, reflecting HMRC’s intensified efforts to clamp down on tax evasion and fraud. This rise is part of HMRC’s broader strategy to ensure compliance and protect public revenue.

2. Targeted offence types and amounts frozen

The data we obtained highlights specific offence types that have been the focus of HMRC’s AFOs, along with the corresponding amounts frozen:

YearOffence TypeNumber of OrdersAmount Frozen
2018/19Excise Duty Fraud6£1,493,460.75
Money Laundering – Other≤5£7,682,816.80
Other Crime6£239,785.00
Tax and Benefit Fraud≤5£939,885.71
VAT Fraud≤5£472,543.61
Total67£10,828,491.87
    
2019/20Excise Duty Fraud≤5£52,800.00
Money Laundering – Drugs≤5£599,004.36
Money Laundering – Other39£16,479,849.78
Other Crime13£1,113,936.71
Other Fraud / Embezzlement / Deception10£3,874,125.44
Tax and Benefit Fraud≤5£132,436.95
VAT Fraud10£1,065,842.30
Total133£24,135,499.76
    
2020/21Counterfeiting / Intellectual Property / Forgery≤5£564,454.08
Excise Duty Fraud6£303,968.68
Money Laundering – Other42£14,763,734.55
Other Crime48£13,097,403.66
Other Fraud / Embezzlement / Deception18£2,932,709.05
Tax and Benefit Fraud≤5£48,604.65
VAT Fraud10£2,026,188.79
Unknown≤5£34,162,053.05
Total103£34,162,053.05
    
2021/22Excise Duty Fraud6£248,981.71
Money Laundering – Other47£8,122,688.27
Other Crime9£26,663,931.18
Other Fraud / Embezzlement / Deception19£2,601,996.13
Tax and Benefit Fraud28£2,416,525.56
VAT Fraud16£3,116,316.65
Total142£43,170,439.50
    
2022/23Excise Duty Fraud9£763,020.99
Money Laundering – Other142£28,972,837.49
Other Crime7£458,818.76
Other Fraud / Embezzlement / Deception17£2,168,864.37
Tax and Benefit Fraud24£3,887,172.44
Trading Standards Offences≤5£2,980,368.00
Unknown≤5£1,051,152.69
VAT Fraud49£4,015,935.42
Total220£44,298,170.16
    
Total since January 2018£156,794,656.34

3. Trends and Insights

From our expert analysis of the previously unseen HMRC data, the following trends and insights emerge:

A. Increased Frequency of Account Freezing Orders

The number of Account Freezing Orders issued annually has shown a consistent increase, with a notable spike from 67 orders in 2018/19 to 220 in 2022/23. This reflects HMRC’s growing reliance on AFOs as a tool to combat tax evasion and financial crimes.

B. Focus on money laundering

Money laundering, particularly through ‘other’ means, has consistently been a major focus, with significant amounts frozen each year. For instance, in 2019/20, £16.48 million was frozen for money laundering – other, and in 2022/23, this amount surged to £28.97 million.

C. Diversification of targeted offences

While money laundering remains a key focus, other offences such as VAT fraud, other fraud, and tax and benefit fraud have also seen substantial amounts frozen. For example, VAT fraud saw a sharp increase in amounts frozen from £472,543.61 in 2018/19 to £4,015,935.42 in 2022/23.

D. Increasing Financial Impact

The total amounts frozen have significantly increased, reflecting HMRC’s aggressive approach. The total amount frozen rose from £10.83 million in 2018/19 to £44.30 million in 2022/23.

Government Statistics on Proceeds of Crime: 2021-2022

The Government’s “Asset Recovery Statistical Bulletin” provides additional context to the trends in asset recovery. Some of the key findings are set out below

A. Total Recovery

  • Total Recovered: £354 million from Confiscation Orders, Forfeiture Orders, and Civil Recovery Orders.
  • Increase: 61% from 2020-2021, 69% from 2016-2017 (nominal values).

Breakdown of sums recovered

  • Confiscation Order Receipts: £154 million, a 56% increase from 2020-2021, 4% higher than the 6-year median.
  • Forfeiture Order Receipts: £191 million, a 76% increase from 2020-2021, highest in six years due to high-value Account Freezing Orders (£115 million) and Cash Seizures (£74.3 million).
  • Civil Recovery Order Receipts: £9.8 million, a 23% decrease from 2020-2021, but 11% higher than the 6-year median.
  • Compensation to Victims.Compensation of£23 million from Confiscation Order receipts, a 37% increase from 2020-2021, but a 27% decrease from the 6-year median.
  • ARIS Funding Distributed: £142 million to POCA Agencies, a 60% increase from 2020-2021, mirroring the overall increase in proceeds of crime recovered.

B. Restraint Orders

Restraint Orders prevent access to assets while confiscation proceedings are ongoing. In 2021 to 2022, £645m was restrained, a 5% increase from £617m in 2020 to 2021.

Restraint Orders by Offence Type

  • Fraud-related Offences: £328m (51%)

  • Drugs-related Offences: £129m (20%)

  • Money Laundering-related Offences: £88.1m (14%)

Restraint Orders by Agency Sector

  • Local Police Forces: £233m (36%)Large POCA Agencies: £183m (28%)

  • Regional Police Forces: £171m (27%)

C. Confiscation Order Impositions

In 2021 to 2022, £179m worth of confiscation orders were imposed, marking a 29% increase from the previous year.

Offence Types

  • Other Related Offences: £54.3m (30%)

  • Money Laundering: £46.0m (26%)

  • Fraud: £44.3m (25%)
  • Agency Sector
    • Small-medium POCA Agencies: £52.0m (29%)
  • Local Police Forces: £51.1m (28%)

Confiscation Order Receipts. In 2021 to 2022, £154m was recovered from confiscation order receipts, a 56% increase from the previous year.

Offence Types

  • Other Related Offences: £57.0m (37%)Fraud: £42.0m (27%)

  • Drugs: £34.2m (22%)
  • Agency Sector
    • Local Police Forces: £56.2m (37%)
    • Small-medium POCA Agencies: £52.1m (34%)

D. Seizures and Freezing Orders

Since 2016, a total of £1.1bn has been seized and frozen, with AFOs being the most prominent subtype since 2018.

Seizure Values

In 2021 to 2022, £193m was seized and frozen.

  • Account Freezing Orders: £132m (68%)
  • Cash Seizures: £57.9m (30%)
  • Listed Assets: £3.9m (2%)

Offence Types and Agency Sector

  • Money Laundering: £101m (52%)
  • Local Police Forces: £103m (53%)

E. Forfeiture Orders

In 2021 to 2022, £191m was recovered under forfeiture orders, the highest on record.

Offence Types

  • Money Laundering: £112.0m (59%)

Agency Sector

  • Local Police Forces: £99.9m (52%)

F. Civil Recovery Orders

Since 2016, £100m has been recovered using civil recovery orders.

Offence Types

  • Other Related Offences: £10.0m (56%)

Agency Sector

  • Local Police Forces: £10.0m (56%)

Strategic implications for companies facing Account Freezing Orders

1. Immediate actions when served with an AFO

If your company is served with an Account Freezing Orders, immediate steps should include:

  • Consulting with our specialised tax dispute lawyers.
  • Conducting an internal audit to understand the basis of HMRC’s concerns.
  • With our assistance, prepare a comprehensive response to HMRC’s allegations.

Our team can assist with each of these steps, ensuring a thorough and strategic approach to addressing the order.

2. Strengthening compliance measures

Proactive compliance is key to avoiding AFOs. This includes:

  • Regular internal audits.
  • Maintaining meticulous financial records.
  • Implementing robust tax compliance frameworks.

We offer tailored compliance solutions to help your company minimize the risk of future disputes.

3. Negotiation and settlement expertise

Given the trend towards settlements, our negotiation skills are crucial in reaching favourable outcomes.

At FWJ, our tax team focuses on clear communication with HMRC, presenting compelling evidence, and negotiating terms that minimise financial and operational disruption.

How our tax team at FWJ can help

At Francis Wilks & Jones, we are uniquely equipped to interpret and utilise recent trends and data to help safeguard your company’s interests. The exclusive insights obtained from our FOIA request and the Government’s “Asset Recovery Statistical Bulletin” provide a crucial advantage in defending against Account Freezing Orders.

Our knowledge of the latest trends, combined with our legal expertise and daily case work on AFO’s ensures that we can effectively navigate the complexities of Account Freezing Orders and help unfreeze your accounts swiftly.


For personalised advice and support, please contact Andy Lynch who heads up our tax team. Andy previously spent 18 years working in the special investigations team at HMRC before joining us at FWJ.

Andy and his team are dedicated to providing the highest level of service to help your company overcome these challenges and resume normal operations.


Andy Lynch at FWJ was literally a life saver for me. I ran in to some tax issues with HMRC and I suffer from mental health issues as well so I was a complex case. Andy took his time to professionally and accurately layout my case and assist me with finding a resolution. I researched a lot of tax advisers before making my decision and I am glad I did and relieved that I chose Andy and FWJ.

Chris Kitchen

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