UK's Tax Authority Wants To Extend Its Powers

by Amanda Banks, Tax-News.com, London

11 August 2006

HMRC has published a consultation document setting out how the powers and accompanying safeguards used in the investigation of tax crime could be updated.

HMRC says that the consultation is part of its work to modernise and integrate the law that underpins its relationship with taxpayers, which aims to support those who seek to pay the right tax but come down hard on those who seek an unfair advantage by not doing so.

HMRC is responsible for investigating suspected criminal activity across the whole range of its responsibilities, including
investigating tax credit fraud and VAT fraud, which can involve organised crime.

HMRC is seeking views on applying the relevant provisions in the Police and Criminal Evidence Act (PACE) across all its activities. Currently, those powers and their associated safeguards are only available for specific taxes and duties. Having the same law apply across the board will be clearer for those under investigation and will increase the effectiveness of HMRC's investigations, says the agency.

PACE doesn't apply in Scotland, and views are also sought on the provisions that would provide an effective and fully integrated regime that is appropriate for Scotland's legal system.

Currently HMRC relies on provisions inherited from its predecessor Departments - the Inland Revenue and HM Customs and Excise. Existing powers for investigating suspected tax crime can be cumbersome and require duplication of effort where different law applies for different taxes.

Modernising these provisions would give trained officers harmonised powers to apply for search warrants and production orders, and powers of arrest across all taxes, all of which would be subject to the important safeguards which attach to criminal investigations generally.

"Criminal Investigation Powers: A Technical Consultation Document" is available on the HM Revenue & Customs website at www.hmrc.gov.uk/consultations/index.htm (click the 'Current consultations' option). The deadline for submitting comments is 1 November 2006.

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