Tax advisers said this week they were wary of striking deals concerning client tax liabilities with the Inland Revenue despite reassurances from the Lord Chancellor that the department remained in control of prosecutions.
They said that the case of Regina v W and the controversial convention signed by all the main prosecuting authorities, requiring them to share information about criminal prosecutions, undermined the Revenue’s authority to settle outstanding tax claims.
John Gwyer, head of tax investigations at Levy Gee, was the most vocal of the dissenters.
He said the Revenue failed to explain why extra measures were necessary if the Hansard Rules continued to apply to tax disputes. But Gwyer was immediately challenged by Martyn Bridges, a partner in the investigations unit at Deloitte & Touche, who said taxpayers that refused to follow the Hansard procedure were more at risk than those who continued to negotiate with the Revenue.
‘The fact remains that the risk of the Crown Prosecution Service or any other prosecuting authority seeking to initiate criminal proceedings against a taxpayer who has reached a civil contractual settlement with the Revenue remains negligible.’
Bridges said the convention showed that if tax advisers suspected there was wider criminality before or during negotiations with the Revenue, ‘extreme care must be taken’.
Gwyer demanded a more detailed account from the Revenue of how tax disputes could still be resolved without leading to further prosecution. But the Revenue said it had given a full account of its actions and confirmed the Hansard Rules still applied.
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