Taxman’s ‘sledgehammer’ gilt strips raid faces judicial review

A firm of tax advisers has applied for a judicial review against HM Revenue
& Customs for raiding its offices last November over an investigation into
gilt strips.

A preliminary hearing is to take place on the 4 July about the taxman’s
actions in its investigation of Mercury Tax Group.

The tax advisers described the incident as using ‘sledgehammer’ tactics when
it claimed to have fully co-operated with officials.

‘We hope the judicial review will lead to a swift decision on the legality of
the tax office’s actions back in November. In our view, there were no grounds
for what was actually done,’ said Neil Buckley, a director at Mercury.

Partners at the firm were questioned by HMRC on 13 November after the firm’s
offices in Leeds and London were visited.

Gilt strip tax schemes involved the purchase and sale of gilts where an
expense was claimed on the purchase and relief on its gains.

The schemes were stamped out by the government in 2004, and were classed as
being the straw that broke the camel’s back in terms of it leading to the
introduction of the tax avoidance disclosure regime.

HMRC this week refused to comment on its investigation or the prospect of a
judicial review.

Related reading