Press Release
13 February 2008
HMRC Gains Phone Tapping Rights For Direct Tax Investigations
New focus: direct tax fraud treated as seriously as VAT and Customs crime
In an indication that HMRC now takes income, corporation and capital gains tax as seriously as it has previously treated VAT and customs fraud, the agency’s ability to gather evidence by phone tapping in direct tax investigations has been significantly extended.
HMRC will, from a date to be announced, be able to gather so-called intercept evidence (from phone tapping and other covert means) in relation to former Inland Revenue offences, such as income tax and corporate tax evasion. This brings HMRC powers in relation to former Inland Revenue matters into line with former Customs matters.
HMRC’s ability to use such evidence is likely to be further strengthened following last week’s announcement by the Prime Minister that the law is to be changed to allow intercept evidence to be used as evidence in court, where previously such evidence has not generally been admissible.
James Bullock, National Head of Litigation at McGrigors comments:
“These developments significantly increase HMRC’s powers and now raise the spectre of phone tapping and interception of email traffic and post in relation to direct tax matters.
“This is a strong sign that HMRC is treating direct tax fraud as seriously as VAT and Customs crimes where previously it has, perhaps, been perceived to take a less strict line. Increasingly, HMRC have been using their criminal powers where they suspect that direct tax avoidance has crossed the line into fraud.
“Corporations and individuals who have engaged in aggressive tax avoidance in the past would be well advised to review their arrangements to ensure they fall well within the law – with no ambiguity.”
For further information please contact:
Louisa Hollins
Financial Dynamics
Telephone - +44 (0) 20 7269 7108
Email - Louisa.hollins@fd.com
Andy Peat
Financial Dynamics
Telephone - +44 (0) 20 7269 7185
Email - andy.peat@fd.com