HMRC goes all ‘Big Brother’
The Regulation of Investigative Powers Act (RIPA) 2000 regulates the powers of public bodies to carry out surveillance and investigation work and to intercept communications. Most people would probably think that such powers could (or, indeed, should) only be used to help fight terrorism or to deal with issues of national security, but RIPA can more widely be used to help prevent or detect crime. Official figures recently released suggest that HM Revenue & Customs (HMRC) is increasingly using RIPA to help ‘spy’ on people suspected of tax or duty evasion.
Not content with its own inspection and information powers and other law enforcement powers to tackle serious crime, HMRC will typically use RIPA to use ‘wire taps’, to intercept and read post, for directed surveillance (following people) and covert human intelligence (informers) work and to ‘bug’ houses/vehicles. Since HMRC was formed in 2005, its use of RIPA powers has increased by 75% and last year almost 5,500 requests were approved – that’s over 100 requests a week!
Whilst, without doubt, some RIPA applications would have been made as part of HMRC’s fight against serious organised crime such as VAT Missing Trader Intra Community (MTIC) fraud, VAT Bogus Registration fraud or Organised Tax Credit fraud, one wonders how many applications were made on cases where HMRC is taking a civil course of action? Is the use by HMRC of RIPA in civil cases proportionate and in the spirit of what the legislation intended?
Over the last twelve months, HMRC has made unprecedented use of its information powers. It served information notices on over 300 financial institutions in the UK requiring them to provide information about offshore account holders to help it detect, investigate and punish what it believes to be widespread tax evasion or avoidance [Please see ‘New Disclosure Opportunity – No time like the present!’]. It has also used its powers to obtain information from NHS trusts, private hospitals and medical insurers to help it check the accuracy of medical practitioners’ Tax Returns [Please see ‘New Tax “Amnesty” for Medical Professionals’]. Having identified persons with potential undeclared income/profits/gains from this information gathering exercise, how many RIPA applications will follow?
In most cases, the subject/suspect will have no idea that HMRC is using the RIPA powers (and, indeed, may never know). But, be warned! The Tax Man is definitely watching!
For further information, or to discuss any of the points above, please contact either Gary Rowson or Mark Taylor on 020 7417 0417.
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