UK Businesses May Face Tougher Tax Man From April

by Robert Lee, Tax-News.com, London

27 January 2005

UK accountants have expressed fears that the Inland Revenue’s investigative powers will become “more draconian” when the department merges with Customs & Excise in April, meaning businesses could face tougher powers of entry and search from the tax man.

At present the search and seize powers differ widely between the two departments. Whereas the Revenue has to obtain a warrant from a judge before it is allowed to enter business premises, Customs & Excise can forgo this formality due to its stronger enforcement powers.

"The seizing and entering powers of Customs & Excise stem from its role of catching smugglers. There is a general assumption that we are all smugglers but have just not been caught yet,” observed Mike Warburton of accounting firm Grant Thornton, according to the Daily Telegraph.

“Customs & Excise has the power to enter and seize documents and goods, but it is much more difficult for the Inland Revenue to do so,” he added.

Warburton fears that investigative powers will be “averaged up” after the merger takes place so that the Inland Revenue would inherit some of Customs’ more forceful search procedures.

Chas Roy-Chowdhury, head of taxation at the Association of Chartered Certified Accountants, agreed, commenting in the same report that: "We need to make sure Customs & Excise's draconian powers are not melded into the Revenue. They need to be modernised and in many cases decreased.”

Recommended