Sunday, November 30, 2008

Misuse of anti terrorism powers raises concerns about potential for misuse of HMRC powers

HMRC now have very wide powers and there is a widespread concern across the profession that taxpayers have insufficient safeguards. **

The police raid on the London home of MP Damian Green, on his Kent home and on his constituency office was conducted using anti-terrorism powers. There has been no suggestion that his involvement in leaks passed to him had anything to do with official secrets. The media, MPs generally and all commentators seem unanimous in their criticism of what appears to be a gross misuse of power by the police.

My reason for referring to this new story on the TaxBuzz blog is that it provides further evidence (if this were needed) that HMRCs powers are also capable of being misused. Indeed I am sure that there are already greater constraints on the Police in this regard than there are on HMRC. And yet still the police were able to rely on anti-terrorism laws to justify their raids on Mr Green.

Senior officials at HMRC have sought to explain why they need to have the new powers afforded to them by Schedule 36 of FA 2008. These follow on from the additional powers contained in FA2007. The entire powers review has been the subject of much discussion and debate. Throughout it seems that HMRC have rejected the profession's near unanimous calls for effective statutory safeguards to prevent misuses of power by HMRC staff and officials.

Such requests invariably seem to fall on deaf ears. On occasion we have heard variations on the usual old cliches:
....would only ever apply to established tax debts once all the normal avenues for appeal had been exhausted, and after repeated requests for payment had been ignored.

Any powers to access bank accounts should we acquire them, would only be used ....after we had exhausted all efforts at contacting the defaulter.

“The cultural message across HMRC is collect the right amount of tax, and not the maximum amount, and to ensure that taxpayers receive their entitlements”

“there are diametric views as to what is actually a safeguard”

it’ll be alright on the night

“Trust us – we shall be reasonable”.
I hope that the events of last week will serve as a lesson. A lesson as to why it is so important for the law to contain effective protection against those who would misuse the wide powers afforded them by the law. It's important as regards anti-terror laws, it's important as regards HMRC powers and it's important for civil liberties. And I've never before been concerned that as an innocent person I had anything to fear from the application of UK law.

**I addressed this point in a recent blog: HMRC powers - the rational arguments that these go too far. This by reference to the 2008 Hardman memorial lecture presented for the ICAEW Tax Faculty by International Tax Barrister Jonathan Schwarz.

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