Tax fraud involves the theft of taxes due to HMRC, or tax credits paid out by HMRC.

Tax fraud includes tax evasion, where an individual or company avoids their tax liability by deliberately failing to declare their income, or by falsifying expenses. It also includes smuggling goods that are liable to excise duty, customs duty or VAT.

Tax theft can happen when a person claims amounts that are not due.

Tax fraud also happens when VAT is charged on a product, but that tax is not paid to the government and is instead stolen by the fraudster. This is known as Missing Trader Intra-Community Fraud (MTIC), or carousel fraud.