HMRC’s powers: tax invasion

HM Revenue & Customs now has very wide powers and there is a widespread
concern across the profession that taxpayers have insufficient safeguards.

The police raid on the London home of MP Damian Green, on his Kent home and
on his constituency office, was conducted using anti-terrorism powers. There has
been no suggestion that his involvement in leaks passed to him had anything to
do with official secrets. The media, MPs and all commentators seem unanimous in
their criticism of what appears to be a misuse of power.

My reason for referring to this is it provides further evidence that HMRC’s
powers are also capable of being misused. Indeed I am sure that there are
already greater constraints on the police in this regard than there are on HMRC.

Senior officials at HMRC have sought to explain why they need to have the new
powers afforded to them by Schedule 36 of the Finance Act 2008. These follow on
from the additional powers contained in FA 2007. The entire powers review has
been the subject of much discussion and debate. Throughout it seems that HMRC
have rejected the profession’s near unanimous calls for effective statutory
safeguards to prevent misuses of power.

Such requests seem to fall on deaf ears. On occasion we have heard variations
on the usual old cliches:

  • It would only ever apply to established tax debts once all the normal
    avenues for appeal had been exhausted, and after repeated requests for payment
    had been ignored.
  • Any powers to access bank accounts should we acquire them, would only be
    used after we had exhausted all efforts at contacting the defaulter.
  • The cultural message across HMRC is collect the right amount of tax, not the
    maximum amount, and to ensure that taxpayers receive their entitlements.

There are diametric views as to what is actually a safeguard.

I hope the Damian Green case will serve as a lesson. A lesson in why the law
should contain protection against those who would misuse the powers afforded
them. It’s important as regards anti-terror laws, it’s important as regards HMRC
powers and it’s important for civil liberties.
Until now, I’ve never been concerned that I had anything to fear from the
application of UK law.

Mark Lee is chairman of the Tax Advice Network

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