How easy to confuse criminals and citizens

The NCA will still have to ‘prove’ the assets either derive from crime or are intended for use in crime – but will be able to obtain an asset restraining order in the interim so that the assets cannot be accessed.

‘Proof’ in this context will be on the balance of probabilities.

The existing confiscation powers depend on conviction for a criminal offence. However, in Blair’s Britain it is considered too expensive to prove many cases to a criminal standard and sometimes suspected criminals are found not guilty. The NCA will not be constrained by such perverse decisions of the courts, but can seize assets even where a person has been found not guilty. He will of course be entitled to prove the assets did not derive from crime – but had better be careful that in doing so he does not lay himself open to prosecution for perjury at his criminal trial.

What has this got to do with tax? Well, for a start, tax evasion is a crime. How convenient for the Revenue to be able to ask the NCA to confiscate a person’s assets instead of having to go to the trouble of proving tax fraud beyond reasonable doubt. And if the taxpayer admits the offence, because he is offered the Hansard statement, the confiscation procedure should be virtually automatic.

Secondly, the idea is that the NCA should have Revenue staff seconded to it so that if the NCA think that even proving criminality to the fairly low civil standard is too hard they can tell its Revenue staff to slam in a tax assessment and leave it to the citizen (sorry, the criminal) to disprove it.

But surely, you may think, some crimes, like burglary, are not ‘trades’ by any stretch of the imagination, so how can the Revenue raise an assessment?

No problem. It is proposed to allow the Revenue to raise a tax assessment ‘where a source of the income (including criminal activity) cannot be identified’. It is then up to the criminal (sorry citizen, I keep confusing the two terms but under these proposals they seem to be the same thing) to prove his assets do not derive from a taxable source.

Note they do not have to suspect criminal activity to use this power; they merely have to see assets and not known from whence they derived.

That makes SCO enquiries and district level full enquiries much easier.

No longer will the Revenue have to show a reasonable belief that the money in your client’s bank account is undeclared takings. Once they see he has money they can raise an assessment. It is then up to the client to prove his story that it is a gift from relatives or gambling winnings or encashment five years ago of savings certificates or proceeds of a PEP cashed in 10 years earlier or whatever. Wonderful! (for the Revenue).

Especially as most people don’t document gifts or winnings and don’t keep records of encashed investments for very long.

Can you prove where your assets come from? I think I can because, unlike most, I keep a personal cash book, but it will take even me an awful long time to reconstruct my life over the forty odd years since I left school.

It is also proposed that old fashioned Revenue confidentiality should be swept aside. They should be able to disclose any ‘suspicions’ about declared income to the police, the NCA or even foreign authorities. After all no one would want to hinder the prosecution of criminals and therefore why not encourage the investigation of suspected criminals?

I had always assumed left-wing authors such as George Orwell and Aldous Huxley were satirically warning against the dangers of right-wing excesses.

I now realise they were serious writers and the progenitors of the New Labour philosophy.

One of the drivers behind the report is that not enough accountants are ‘shopping’ clients where they have a suspicion the client may not be wholly honest. It is probably unethical to do this but if obeying ethics invites draconian measures what are we to do?

  • Robert Maas is a partner with Blackstone Franks.

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