Human rights force VAT probe rethink

The decision, which involved three taxpayers, could have far-reaching consequences for the way Customs carries out its investigations.

In the case, Han & Yau, Martins & Martins and Morris v Customs & Excise, the tribunal ruled that although action was brought under civil proceedings, the matters should be considered criminal for human rights purposes based on the severity of the penalties imposed and the nature of the offences.

Treating a matter as criminal would give a taxpayer additional protection, including the right to silence and the right against self-incrimination.Mark Whitehouse of KLegal, KPMG’s legal arm, said: ‘Customs will now have to think very carefully how they implement the Human Rights Act.

‘For instance, investigators will need to issue cautions otherwise evidence could be inadmissible, and they will not be able to draw adverse inferences from taxpayers exercising the right to silence.’

Customs & Excise said it was considering an appeal.

For further analysis of the tribunal decision, visit

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