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HMRC Legal Powers

Many people remain unaware that in an age where data protection and privacy are big issues, championed by the Government, such rights do not exist when it comes to tax affairs.

In this area, the HMRC, subject to oversight, has very wide powers to conduct surveillance and intrusively snoop on suspected tax dodgers.

Most would agree that tax evasion is a very serious issue but even so, the extent of the intrusion and lack of knowledge of the powers, coupled with the fact that it is unclear whether such activities are being conducted against those alleged offenders who are evading millions in tax rather than thousands, makes this a controversial activity.

For anyone unaware, the powers used by HMRC are not new, they have been around for over a decade, having originally been created by the Regulation of Investigatory Powers Act 2000 (ironically the same Act created some fairly stiff punishments for members of the general public found to have interfered with privacy, especially by intercepting private communications aka hacking).

Setting aside moral or political arguments, how far can HRMC go in covertly investigating?

The powers include:-

  • The ability to track a suspected tax evaders web browsing
  • With a warrant they are permitted to intercept and read private emails or eavesdrop on telephone calls.
  • Potentially to bug an office, house or car.
  • Accessing credit reference information so as to attempt to make a comparison between alleged levels of income, information and documents given to credit companies and spending habits which may not match information given in tax returns

As explained above, some of the powers do require a prior application for a warrant but the extent of the use of some of the techniques may come as a surprise. As disclosed by a recent Freedom of Information Act request, in the last year there were more than 14,000 authorised views of “communications data” relating to taxpayers.

It is clear we have moved from an era of a relatively laissez fair approach to enforcement to a new era where law enforcement agencies mean business and where it comes to financial offences, they not only have a raft of very powerful legal tools but they are now also being resourced by the Government.

Gannons Solicitors offer specialist help with tax disputes legal problems working in conjunction with Tax Agility Chartered Accountants.

This blog is a general summary. It should not replace professional advice tailored to your specific circumstances.

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