Revenue Law Supplement File 1: General Updating


they held that the Revenue officials were on the facts ‘charged with the duty of investigating offences and charging offenders’. This was in contrast with the trial judge who had held that the Revenue were simply trying to collect money due to the state. The effect of the CA decision would be to impose a duty on the Revenue under the relevant Code of Conduct to caution the accused and make a tape recording of the interview if the information was going to be used as evidence in criminal proceedings. However, as the court of appeal, explained the fact the Code had been broken did not lead automatically to exclusion—see paragraph 41. Here the Revenue had sought to use the evidence to show the accused’s dishonest state of mind rather than as proof of the statements made.

TMA 1970, section 105 has been rewritten by FA 2003 section 206.

On extent of power of confiscation under Criminal Justice Act 1988, section 71 see A-G’s reference (No 25 of 2001) [2001] EWCA Crim 1770, 2001 SRTC 1309, CA rejecting A-G’s plea that the confiscation order should have extended to all the defendant’s undeclared profits.

In R v Foggon [2003] EWCA Civ 270 [2003] STC 461 the accused was found guilty of cheating the public revenue and made subject to a confiscation order. Disputing the scope of the order he argued that in looking at the pecuniary advantage, he had obtained the court should look only at the unpaid corporation tax. The court disagreed partly because the tax was due from the company not the appellant (which makes a nice counterpoint to R v Allen—see paragraphs 21–22.

The Proceeds of Crime Act 2002 is of great importance to the tax system since the definition of crime is very wide. The Act creates a new Assets Recovery Agency which will have powers to recover the proceeds of crime by civil process rather than criminal. It will have many other powers including one over the functions of the Inland Revenue in relation to a taxpayer where there are reasonable grounds to suspect that a person’s income or gains are derived form crime—although not the prosecution of tax offences (section 323(3)(b)). There are also new obligations on advisers to pass information to the authorities where the person knows or suspects that another is engaged in money laundering or has reasonable grounds for such suspicion. Although at present these rules apply to those working in the regulated sector a new EC Directive (2001/97/EC) will extend its scope to all professionals in 2003. The Act (section 333) expressly preserves the scope of legal professional privilege, which makes the approach of the House of Lords in Morgan Grenfell all the more important. These and other points are made by Cassidy in 2003 Tax Law Journal issues 661 p 5 and 662 p 7. On the Act see now Mumford and Alldridge, 2002 BTR 458–469.

On offence of fraudulent evasion of income tax created by FA 2000, see Salter 2002 BTR 489–505.

p 78        §4.5.4

Blumenthal, Christian and Slemrod 54 National Tax Journal 125 report an interesting experiment in which taxpayers were reminded of all the good things that can be done in one community if everyone pays their taxes. It seems to have made little difference.

See also Davis Hect and Perkins, 2003, Vol 78 Accounting Review summarised 51 Canadian Tax Journal 2003, p 1073 arguing mathematically that enforcement levels can be lower if the population is compliant but must be higher if the population is non-compliant. This conclusion means that it is too simple just to say that high levels of enforcement mean less evasion—it all depends where you start from. The summariser adds ominously that paper is not written so as to be accessible to a general audience.

p 79

On TMA 1970, section 11, see Slater v General Commissioners [2002] STC 246.

p 81        §4.6.2

On litigation on legal professional privilege and section 20, see House of Lords decision discussed in Human Rights above §2.4.

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