Deadline Approaching On New Powers Consultation, Says HMRC

by Jason Gorringe, Tax-News.com, London

01 March 2007

HM Revenue and Customs warned on Tuesday that the deadline for comments on the tax authority's proposed new powers is approaching.

The consultation document setting out how the Government proposes to update HM Revenue & Customs' (HMRC) criminal investigation powers and accompanying safeguards was published in January.

The consultation is the latest stage of HMRC's work to modernise its powers, deterrents and safeguards. Currently, HMRC relies on provisions inherited from its predecessor departments - the Inland Revenue and HM Customs and Excise - which evolved over a considerable period of time, and involve substantial differences between different areas and taxes.

An earlier consultation paper, published in August 2006, set out a new approach on HMRC criminal powers.

The consultation document published earlier this year includes draft clauses that give effect to that approach - modified in the light of consultation - and invites comments on them. The document also contains a summary of responses to the August consultation.

Under the new approach, HMRC's investigatory powers in England, Wales and Northern Ireland would be based on the Police and Criminal Evidence Act (PACE), while a statutory code would be introduced for Scotland, where PACE does not apply. This approach received broad support in the earlier consultation.

As now, specifically authorised officers would be able to apply to the courts for search warrants and production orders, and exercise powers of arrest. Modernisation would harmonise these powers across all taxes, and would mean that HMRC criminal investigations were subject to the statutory codes of practice and safeguards which attach to criminal investigations generally.

Criminal investigation powers are only available to the specialist teams in HMRC who actually undertake criminal investigation work. They are not available to other HMRC staff undertaking routine assurance or compliance work. HMRC has reorganised recently to ensure a clear separation between the criminal investigation work and all its other responsibilities which affect the vast majority of taxpayers.

The changes set out in the clauses would reinforce the separation and specifically restrict access to these statutory powers to specialist officers authorised by the Commissioners of HMRC.

In a statement, HMRC warned on Tuesday that:

"There are just two weeks left, if you want to comment on the latest consultation documents on HMRC's review of powers, deterrents and safeguards."

Head of HMRC's powers review team, Simon Norris, added:

"HMRC really wants to hear the views of accountants, businesses, representative bodies or anyone else with an interest. They all help to shape HMRC's future powers, deterrents and safeguards. So, if you have something to contribute, please contact us by the 13th of March."

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