Criminal powers
In its response to HMRC's 'Modernising Criminal Investigation Powers' consultation document, the Chartered Institute of Taxation (CIOT) says that HMRC should not have been entrusted with a review of their own powers and the exercise of criminal powers should be left to the police.

Stephen Coleclough, CIOT Technical Committee Chairman, said: “The need to bring the police in where serious criminal issues arise in relation to the administration of tax would send important signals to the tax paying community.

"Firstly, it would emphasise the seriousness of the matter. Secondly, it would provide protection for both taxpayers and tax administrators by bringing in an independent body.”

The CIOT paper states that the proposed increase in HMRC powers would alter the relationship between the taxpayer and the tax administrator. It is important that HMRC retain their role as a tax collector and administrator of civil law as opposed to tax law becoming part of the criminal justice system.

Mr Coleclough said: “Tax crime is not more serious than other crime just because it is tax. All crime harms society. It is wrong to leave innocent people without protection because HMRC believe that the general interest overrides the needs of what they expect to be a few innocent parties drawn into these regulatory powers.”

Police powers
The Professional Contractors Group (PCG) has also joined in the criticism of proposals to grant new criminal investigation powers to HMRC.

In its response to HMRC’s consultation, the group calls for greater clarity over any new powers, and argues that improving HMRC’s culture and accuracy should be higher priorities.

The group argued that it was important to keep all criminal investigation powers separate from regular compliance work and that this separation should be enshrined in law. There was concern that over-zealous inspectors could use threats of criminal investigations to intimidate people.

PCG’s key recommendations include:

• HMRC to be made more accountable; all complaints about their use of police-like powers to be handled by the Independent Police Complaints Commission or an equivalent body.
  
• Improved training for all inspectors, including compulsory private sector placements to enhance their understanding of commercial reality.
  
• An independently audited culture of neutrality to be established within HMRC, ensuring inspections are carried out in a fair and rigorous manner.

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Susie Hughes © Hardhatter 2006
The Editor