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HMRC's criminal investigation powers are to be updated, according to a consultation document published by the Government this week.

The consultation forms part of HMRC's work to modernise its powers, deterrents and safeguards following the merger of the Inland Revenue and Customs & Excise.

An earlier consultation paper, published in August 2006, set out a new approach on HMRC criminal powers. The further consultation document now being published includes draft clauses that give effect to that approach.
 
Under the new approach, HMRC's investigatory powers in England, Wales and Northern Ireland would be based on the Police and Criminal Evidence Act (PACE), while a statutory code would be introduced for Scotland, where PACE does not apply.

Specifically authorised officers will be able to apply to the courts for search warrants and production orders, and exercise powers of arrest. These powers will apply across all taxes and mean that HMRC criminal investigations will be subject to the statutory codes of practice and safeguards which attach to criminal investigations generally.

Criminal investigation powers are only available to the specialist teams in HMRC who actually undertake criminal investigation work. They are not available to other HMRC staff undertaking routine assurance or compliance work. HMRC has reorganised recently to ensure a clear separation between the criminal investigation work and all its other responsibilities which affect the vast majority of taxpayers. The changes set out in the clauses would reinforce the separation and specifically restrict access to these statutory powers to specialist officers authorised by the Commissioners of HMRC.

Proposals to extend HMRC's statutory powers to apply for surveillance warrants under the Regulation of Investigatory Powers Act 2000 (RIPA), to help combat serious tax crime by making HMRC's existing surveillance powers available against a wider range of criminal tax activity, are included in the Serious Crime Bill published this week. This takes forward proposals set out in an earlier HMRC consultation document published in March 2006.

Sarah Laing
Editor, TaxationWeb News

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Modernising powers, deterrents and safeguards: Criminal Investigation Powers