The investigator then handed a copy of the Hansard extract to the taxpayer and his agent and read it aloud. The text was as follows:-
‘In reply to a Parliamentary Question the Chancellor gave the following answer regarding serious tax fraud.
“The practice of the Board of Inland Revenue in cases of suspected tax fraud is as follows:
The Board reserves complete discretion to pursue prosecutions in the circumstances it considers appropriate,
Where serious tax fraud has been committed, the Board may accept a money settlement instead of pursuing a criminal prosecution.
The Board will accept a money settlement and will not pursue a criminal prosecution, if the taxpayer, in response to being given a copy of this Statement by an authorised officer, makes a full and complete confession of all tax irregularities”’.
This revised statement of the Board of the Inland Revenue’s policy was made in response to a Parliamentary Question on 7th November 2002.
The statement was revised to accommodate Lord Hutton’s remarks in R v Allen (2001) BTC 421 to the effect that it would be unfair to prosecute a taxpayer who has made a full confession under the Hansard procedure. Thus, the statement made it clear that HMRC did not have the absolute discretion to prosecute, no matter what the taxpayer’s actions. It should be noted, though, that in order to obtain the protection of Hansard, the confession had to be full, not piecemeal, and that HMRC would not offer Hansard indefinitely, so the confession also had to be timely.
Having read the extract, the investigator then asked the taxpayer if he had understood it but without offering any explanation of its meaning himself, and he would dissociate himself from any attempt to interpret it made by either the taxpayer or his agent, lest he be misunderstood. If asked, he would say that it would be wrong for him to elaborate on this statement of Board’s policy as given by a minister to Parliament.