back to article Corporate criminal tax offences likely to further increase HMRC's use of dawn raids, says expert

"Dawn raids" by HM Revenue and Customs (HMRC) on businesses and individuals are likely to remain high following the entry into force of new corporate criminal tax offences, an expert has said. The number of property raids carried out by HMRC as part of its clampdown on white collar tax evasion has increased by 34% over the …

  1. Anonymous Coward
    Anonymous Coward

    Creative Accounting ?

    "increased by 34% over the last five years, from 499 to 2011/12 to 996 in 2016/17, according to figures obtained by Pinsent Masons, the law firm behind Out-Law.com. HMRC carried out 1,563 property raids in total last year, up by 8% from 2015/16, according to the figures."

    Is it just me, or do those figures just not add up? 499 to 996 is almost doubling, ie 100% increase not 34% and "1563 last year" seems to conflict with "996 in 2016/17" ?

    With accounting skills like that, no wonder HMRC are knocking on the door......

    1. Wensleydale Cheese

      Re: Creative Accounting ?

      1563 last year" seems to conflict with "996 in 2016/17" ?

      methinks the 996 figure is referring to the raids for "white collar tax evasion":

      The number of property raids carried out by HMRC as part of its clampdown on white collar tax evasion...

      Well, that's the only way I can make sense of it. :(

  2. Anonymous Coward
    Anonymous Coward

    Tax evasion?

    So are they going to raid Google then? I bet not, target the little people instead.

  3. Anonymous Coward
    Anonymous Coward

    Time to rein in the use of dawn raids

    Dawn raids were introduced for the purposes of taking down violent criminals who would attempt to defend themselves from arrest

    Why are they being used by the tax agency??????????????

    This is just another example of the state acting like a bunch of jackbooted thugs with no regards for anyone but themselves and even then lets hope you dont become an ex-party member

    Its time there was proper public oversight (and i dont mean by vested-interest parties like courts/judges or even parliment) of the use of these raids and how they are executed and what if anything is gained by the use of them against people who have no violent past or proceedings against them for violent acts

    1. JohnMurray

      Re: Time to rein in the use of dawn raids

      Tax evasion is a crime.

      It is long past time this happened...they have been raiding building sites early in the morning for years now...

      With evasion running at between £30 billion - £100 billion plus, it is quite right to treat it as serious crime.

      More raids.. Try raiding the sun/mail/telegraph... Please.

      1. Anonymous Coward
        Anonymous Coward

        Re: Time to rein in the use of dawn raids

        If you read carefully I quite clearly **did not** say that raids couldnt be carried out, or that investigations into the crime of fraud were not supported.

        If you even bothered to attempt reading the comment you will in fact see that I said that the problem was **dawn raids** which are often traumatic events for most people & which operate under the poilcy of 'shock&awe' in order to establish a level of control over the suspect that prevents them from thinking or acting in their own defence

        This makes sense against those who are under investigation for inherently violent acts or who have commited such in the past. It even makes sense against terrorists who may have explosive devices. It does not make sense against otherwise normal members of society who may have families/children at home if they are unlucky to have their property raided & it doesnt make sense against all the other members of an office to be subject to that kind of violence (are you sure no one in the office has ptsd from any past event before the raid? these dawn raids often can cause ptsd themselves).

        There are many options for investigating fraud, using dawn raids is the equivalent of using a nuclear bunkbuster cruise missile to take out a 2man checkpoint on a dirt road. Its brutal and there is no need for the tax office to be weilding such powers. In fact its time that all powers of entry onto private property were fully reveiwed to examine who has rights at the moment & whether they should contine to have them which can be done by having oversight & seeing what if anything is gained by these violent raids

        1. Anonymous Coward
          Anonymous Coward

          Re: Time to rein in the use of dawn raids

          If there are company people availible at the company address at dawn then why should they not turn up then? If your company's address is where you live then the price is you are availible for audit whenever they want to turn up.

          If you are a director you are responsible for your company 24/7 not just when you feel like it.

          If you do not like dawn raids then do not be at the company address at dawn.

          The fact is that most people still have their tax taken from their wages before they get them, for everyone else then you are going to have to accept the results of far to many people dodging their tax hiding amongst you.

      2. Peter2 Silver badge

        Re: Time to rein in the use of dawn raids

        And the Guardian, as the Guardian Media Group (like many other large companies) is well known to use wonderfully creative accounting to evade paying any tax. Just because they write articles attacking these practices doesn't mean they don't do it themselves.

        But seriously, there is no difference between turning up unannounced at a civilised hour of the morning to turning up at 5 in the morning unless you have evidence to suggest that people are sitting over the evidence with a can of fuel and a lighter and you desperately need to catch the culprits in bed asleep when you hit the target to prevent destruction of evidence.

    2. Doctor Syntax Silver badge

      Re: Time to rein in the use of dawn raids

      "Why are they being used by the tax agency?"

      Overtime and/or unsociable hours payments?

    3. Anonymous Coward
      Anonymous Coward

      Re: Time to rein in the use of dawn raids

      It does sound a bit like HMRC taking a leaf out of the police's book and using highly-publicised dawn raids as a form of extra-judicial punishment.

    4. DavCrav Silver badge

      Re: Time to rein in the use of dawn raids

      "Dawn raids were introduced for the purposes of taking down violent criminals who would attempt to defend themselves from arrest"

      Surely dawn raids are there so that the person doesn't destroy all the evidence. As an example, see the first episode of Black Books. (No Youtube clip because it's blocked in the UK.) This is even easier in financial crime, as a quick flash drive in the microwave will get rid of many documents.

      1. Adam 52 Silver badge

        Re: Time to rein in the use of dawn raids

        All rather prosaic. All the dawn raids I know of were purely because it's the best way to guarantee that the person you're after is home.

    5. Anonymous Blowhard

      Re: Time to rein in the use of dawn raids

      I think that in this case "dawn raids" refers to unannounced raids on properties to collect evidence, not necessarily that they turn up at 04:00 with a SWAT team.

      "Why are they being used by the tax agency??????????????"

      I think they want to avoid giving suspects a week's notice to take the Enron route of shredding the evidence.

      "Its time there was proper public oversight (i dont mean by vested-interest parties like courts/judges)"

      If you don't trust the legal system to manage the legal process, who do you trust? If judges are corrupt, you have to prove that and replace them, not invent a parallel layer to perform the same function (who's to say your new layer is incorruptible anyway).

      1. Anonymous Coward
        Anonymous Coward

        Re: Time to rein in the use of dawn raids

        "Its time there was proper public oversight (i dont mean by vested-interest parties like courts/judges)"

        If you don't trust the legal system to manage the legal process, who do you trust? If judges are corrupt, you have to prove that and replace them, not invent a parallel layer to perform the same function (who's to say your new layer is incorruptible anyway).

        Just a quick question for you, how do you get to "don't trust the legal system" from the understandable desire to not have someone or a system that is involved in issuing warrants for these kinds of raids?

        We all have vested interests and conflict of interests, should the system and people who issue approvals for these kinds of raids be invovled in the oversight? You clearly think so, but then how do you ensure that transparency and due process is followed without allowing corruption to seep in? How do you stop the 'rubber stamp' syndrome so many judges seem to be afflicted by?

        *aside elreg mods, can non badge holders please get some sort of quote box, it would make things a lot easier. Just one style, not a whole bunch of them, it would make responses easier to format

    6. Rol Silver badge

      Re: Time to rein in the use of dawn raids

      "What on Earth is going on in the car park?"

      Pointing, seemingly indiscriminately, at every car out there. The PA has piqued my attention, and I wrench myself out of the chair to stroll across and see for myself.

      "That doesn't look right" And I find myself once again following my PA's lead "What on Earth is going..It's....Oh my God! It's HMRC doing a casual afternoon raid"

      The instinct to clutch at my chest, in a hope the heart attack would go away, is quickly averted as I find my hands busily pulling hard drives out of enclosures and smashing them on the desk.

      "Quick, quick! Take these...and..and...Take them down to the canteen and bung them in the microwave. Full power for twenty minutes"

      The PA is looking slightly disturbed and contrary to my instructions is still firmly affixed to the spot, several very long nano-seconds after my clear and precise orders had been given. "Come on! Move! Go! Do it!"

      "I don't believe microwaving will have the desired effect, but more than that, I can't be involved in any illegal activity"

      "What!?"

      "I'm sorry, but I'm not risking jail for a measly 25K and a free parking space"

      "You ingrate, And I bet when they start asking questions you'll sing like a bird"

      "I can't take the risk not to. I'm sorry"

      "Oh well" as I strolled toward the window to see the last of the officers trundle into the building "I bet you can't fly like a bird" And you know what. He couldn't.

      And that is why HMRC do dawn raids and not just saunter in mid-afternoon.

      "

  4. Doctor Syntax Silver badge

    "From 30 September, it will be a criminal offence in the UK if a business fails to prevent its employees or any person associated with it from facilitating tax evasion."

    What does associated mean? Someone buys a ream of printer paper at the local stationers and uses a few sheets to print fake invoices. Is the stationer at fault because it didn't ensure (how?) that its employee didn't take steps (what steps?) to make sure the customer wasn't going to use any of the paper to evade tax? And what about the printer manufacturer? The printer cartridge supplier? The Royal Mail for delivering the printer cartridges?

    1. Anonymous Coward
      Anonymous Coward

      Re: What does associated mean?

      Good question. A couple of decades ago I'd have suggested reading the act, where such terms would no doubt be clearly and precisely defined. But nowadays the answer is probably "that'll be for the courts to decide."

    2. TitterYeNot

      "What does associated mean"

      I assume that in this context it means people doing work for a company who are not employees i.e. contractors (individuals or companies.) I've come across a few large companies who refer to workers who are not full-time employees as associates.

      Stops a company from saying "Well, they're not an employee of ours, so it's not our responsibility."

      1. Lysenko

        "Well, they're not an employee of ours, so it's not our responsibility."

        That's just the point. It isn't their responsibility (arguably) because part of what distinguishes a contractor from an employee is the degree of control that the company can apply. A lot of this has been worked out in terms of H&S law, but if you just apply blanket audit and disclosure rules to both employees and contractors without detailed consideration then you're liable to trip over IR35, and if (hypothetically) you are a specialist contractor working for several competing organisations (e.g. Banks) then there is no way in hell any one of those organisations can be allowed to audit everything you are doing.

      2. Doctor Syntax Silver badge

        Stops a company from saying "Well, they're not an employee of ours, so it's not our responsibility."

        Yup. Maybe I should have queried "facilitating". In the instances I gave the stationer, printer and cartridge vendor and Royal Mail could all be argued as facilitating. At the very least there's an opening for a reductio ad absurdum argument in defence.

    3. Lysenko

      Arguably that makes paying for anything in cash a criminal offence since cash payments demonstrably facilitate tax evasion when compared to alternatives that leave a more robust audit trail.

      Fill up with £80 of fuel at a petrol station and the card machine is on the blink. If the vendor declines to accept an IOU then all your available options become criminal offences.

      1. DavCrav Silver badge

        "Fill up with £80 of fuel at a petrol station and the card machine is on the blink. If the vendor declines to accept an IOU then all your available options become criminal offences."

        I don't believe that's true. The offence is to fill up without any means of payment. A valid credit card is a means of payment, and you could not reasonably have known theirs wasn't working. If, on the other hand, they put a big sign on the frontage saying 'cash only' then you would have known. And anyway, they should have a No Means to Pay form that you fill in and you get 24-48 hours (I think it depends on the garage) to come back with payment.

        1. Anonymous Coward
          Anonymous Coward

          @DavCrav "Fill up with £80 of fuel at a petrol station...."

          I had exactly this and there is indeed a form, even though your car reg is the real identifier, once you find a working bank machine you get the form back.

          That the particular garage wanted to retain my drivers license as well was a bit rich but I just said no and said call the police if you like.

      2. JohnMurray

        Not really.

        If they refuse to accept a compromise payment/settlement, then drive away and come back later.

        Driving away without paying is only illegal if you do not intend to pay...

  5. Elmer Phud

    Yeah, Yeah --and???

    Numbers of raids are up - no indication of the number charged or any convictions.

  6. short a sandwich

    Obviously HMRC have read BOFH and a dawn raid ensures there's no unexpected cattle prod/Hector interface issues. A competent BOFH will arrive at a civilised hour. Friday lunch may also be a going concern for HMRC too.

    1. Doctor Syntax Silver badge

      "Obviously HMRC have read BOFH and a dawn raid ensures there's no unexpected cattle prod/Hector interface issues."

      A competent BOFH will have removed the tile just inside the server-room door. Once Hector has made it past the portcullis, booby-trapped guillotine blade etc, it'll be straight down into the oubilette.

  7. Anonymous Coward
    Anonymous Coward

    The photo shows a view of the Shard from across the river. The sun is on the right (=West), so it is sunset, not dawn.

    1. Blofeld's Cat Silver badge
      Coat

      Hmm...

      "... sunset, not dawn."

      That's still pretty well "on time" in government circles.

      Besides they need to get the "P666 Dawn Raid Approval Form" signed in triplicate, sent in, sent back, queried, lost, found, subjected to public inquiry, lost again, and finally buried in soft peat for three months and recycled as firelighters, before the raid can go ahead.

  8. NB

    "All businesses, but particularly the banks and professional services firms at particular risk of falling foul of the new offences, should refresh their raids and critical incident procedures and seek professional advice in order to know what to do in case HMRC officers appear without warning, Collins said."

    Here's a crazy suggestion: pay your fucking taxes.

  9. schmerg

    Powers of entry without warrant

    *HMRC does not, however, have the power to enter business or residential premises without a search warrant, which must be granted by a magistrate.*

    Customs and Excise ("the VAT-man") had certain powers of entry without requiring a warrant, dating back to the urgency of intercepting smugglers and the like. When Customs and Excise merged with the Inland Revenue, the larger body inherited some of these powers.

    According to the last review of these powers (2014 - https://www.gov.uk/government/publications/hmrcs-powers-of-entry-review-final-report) HMRC still retain some of these powers, such as "Power to enter and inspect the production premises of any biofuel or other fuel substitute, other than a private dwelling house" and "Power to, in the daytime, enter and inspect the premises of a denatured alcohol user and to inspect, examine and take samples of any denatured alcohol, or goods containing denatured alcohol, found there." (which does include private dwellings).

    IANAL but just to say, I believe there are still some circumstances where HMRC has the power to enter business or residential premises without a search warrant, some of which admittedly are subject to further safeguards.

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