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Dedicated to the taxpayers of Britain, and the employees of Her Majesty's Revenue and Customs (HMRC), who have to endure the monumental shambles that is HMRC.
Friday, 14 November 2008
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.
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