With an apparent increase in raids and hard-hitting compliance activity in
recent weeks on direct tax issues, advisers are bracing themselves for further
The Serious Organised Crime and Police Act, which became law in April, gives
powers to issue disclosure notices on advisers for suspected frauds of greater
HM Revenue & Customs officials can deliver the notices, which force
advisers to answer questions or face a year in prison, on the say-so of the
Revenue & Customs Prosecution Office (RCPO).
Tax lawyers have criticised the provisions as heavy handed: ‘One would like
to see judicial scrutiny for this level of power,’ said James Bullock, head of
tax litigation and regulatory at McGrigors.
‘These powers can and will be used. And we can guess where they will be
targeted. Recent events suggest that criminal investigations are on the increase
and it is only a matter of time before somebody is forced to answer questions,’
The tax authorities have carried out two raids in the past few months, of
Britannia, the building society, and of advisers involved in charity tax
schemes, whose identity Accountancy Age cannot reveal for legal reasons.
A spokewoman for RCPO said some minor changes had been made to the rules,
stressing their use for organised tax credits fraud and carousel fraud.
She denied rumours that the approval had been brought forward in order to be
used on a specific investigation: ‘The RCPO Powers were connected historically
to the HMRC review of powers, but since the setting up of RCPO separately from
18 April 2005 there is no reason for the connection.’
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