HMRC ramps up number premises raids

HMRC is continuing to ramp up the number of raids on premises it carries out as part of criminal investigations, searching 761 properties in the last year – a 28% increase on the previous year when it conducted 593 raids, according to Pinsent Masons, the international law firm.

This is 53% more than five years ago when HMRC conducted 499 property searches. The continued rise comes as HMRC is under on-going pressure to increase the number of successful prosecutions for tax evasion and has been granted extra resources to enable it to pursue more cases.

Pinsent Masons said that HMRC has the power to raid premises in order to seize vital evidence to help it secure prosecutions for tax evasion with a search warrant granted by a judge or magistrate.  Individuals at the property can also be searched and personal documents, emails and other electronic files can be taken.

This upward trend shows no signs of slowing, as HMRC is increasingly pushing to treat what would previously have been seen as aggressive tax avoidance as tax evasion, in its bid to crack down on those it sees as not paying their fair share of tax.

Pinsent Masons adds that the forthcoming new corporate offence to hold companies criminally responsible if they fail to prevent their staff, contractors or other agents from facilitating tax evasion could also lead to more raids being carried out. The government is currently reviewing responses to its consultation on the draft legislation and guidance.

The new multi-jurisdictional agreement signed last year by more than 50 countries to exchange tax information starting from next year is likely to allow HMRC to gather even more information than ever on taxpayers it suspects of wrongdoing, and use it to apply for more search warrants.

Paul Noble, tax director at Pinsent Masons, said: “Criminal prosecutions for tax evasion can be notoriously difficult to bring to court, so raiding property is a vital way for HMRC to get hold of the crucial evidence it needs.

“Tax evasion investigations can be complex and time-consuming to uncover what are often well-hidden tracks. Often the only way to do this is by getting access to personal documents, files or correspondence through searches of a suspect’s homes or business premises.

“HMRC is taking greater advantage of these powers as a shock and awe tactic. By raiding premises, it not only hopes to be able to seize the proof it needs to build its case, it’s also a clear show of strength and intent which should act as a deterrent to others.”