Fears that rights of honest taxpayers will be sacrificed in the fight against fraud

While the firm did not condone deliberate misuse of the system, it said Lord Grabiner QC’s paper on the informal economy, produced for chancellor Gordon Brown, had not been put out for consultation and looked set to form the basis of the most significant raft of legislation to go before Parliament this century.

Director of tax investigations John Gwyer said: ‘The implications which the proposals have for the honest taxpayer finding himself on the receiving end of and Inland Revenue inquiry, for example, are quite alarming.

‘The paper is packed with suggestions about increasing the power of the authorities to exchange and share information as well as using data from other sources, such as banks and telephone numbers, to check for suspicious signs of fraud.’

Gwyer warned the proposals are so radical and likely to have such an impact on civil liberties that he would expected Lord Grabiner to have included a section of his report on safeguards to protect individuals from abuse of power and process.

‘These suggestions, coupled with the Inland Revenue’s earlier proposals to increase their powers in relation to the investigation of serious tax fraud, amount to the most intensive and concentrated attack on the rights of individuals and professionals ever experienced in this country,’ Gwyer added.

‘Whilst we would wish to see the dishonest dealt with as effectively and expeditiously as possible we would not want to see the rights of the honest sacrificed in the process.’

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