It seems that HMRC became a wee bit over enthusiastic when it executed search warrants for Mercury tax Group, a tax consultancy in Leeds, in 2007.
The High Court has ruled that the warrants were unlawful.
Mercury Tax Group and its managing director, Neil Masters, won a ruling that HMRC failed fully to disclose material relevant to its suspicion that a tax avoidance scheme operated by the company was dishonest.
Mr Justice Underhill said Leeds Crown Court was "misled" into granting the warrants.
He stated that it was a borderline case for the deployment of the "nuclear weapon" of search warrants on not just business premises but the private homes of individuals.
Adding that HMRC was under a duty to put its case "with scrupulous accuracy and in such a way that the judge was able to made a fair assessment of the grounds for suspicion being put forward.
That did not occur."
In the tax year 2002-03 Mercury operated a tax avoidance scheme on behalf of around 23 clients. HMRC began investigating in 2004, in November 2007 it executed search warrants at three Mercury offices, Mr Masters' home and the homes and several office addresses of 22 of the clients.
In its judicial review challenge, Mercury noted that it had already supplied all the documents required by HMRC, who said its requests for information had been satisfied in full. It sought the return of all documents seized in the searches of its premises.
Tax does have to be taxing.
HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"
Hmm... I wonder how The Times feels about people copying and pasting their articles into their blogs. Interestingly, The Times article goes on to quote the judge as saying that:
ReplyDelete"The only possible damage [to the public interest in quashing the warrants] would be if the return of seized documents led to the blocking of any prosecution which ought to take place.
"As at present advised, this does not seem to me a likely outcome."
Now, while the way the last sentence is presented in the article leaves open the possibility that the case may not go to prosecution, I'd be willing to bet (better make it a sportsman's bet to preserve my anonymity, Ken) that he means that the guys at Mercury are going to be prosecuted, and their tactic of using a judicial review to try to use technicalities to save them isn't going to work.
Unfortunately I haven't been able to find the court proceedings online, but if anyone could post a link I'd be most interested.
If my reading of these quotes is right, it's unfortunate that HMRC have potentially jeopardized the prosecution of a firm that may have fraudulently assisted wealthy individuals and/or businesses to avoid tax, thereby ripping off the vast majority of us who are subject to Pay As You Earn.
It would be fair to say that my sympathy for Mercury is limited.
http://business.timesonline.co.uk/tol/business/law/article5147718.ece
The Times is not the only source
ReplyDeletehttp://www.halifaxcourier.co.uk/latest-york-and-humberside-news/Revenue-misled-court-into-granting.4691964.jp
http://www.teletext.co.uk/regionalnews/yorkshire/0fe58963627ef1c87e52cf2ea6493e11/Court+misled+over+warrants.aspx
Well that's OK then.
ReplyDeleteJust as if tax inspectors are tall craggily handsome blokes like in that picture. They are all hideous gargoyles with external abdominal organs on their faces and an aura of putrescent evil that shrivels anyone within a 50 foot radius. Well known fact that.
ReplyDelete