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More questions for Dave Hartnett

By December 12, 2014June 13th, 2017No Comments

Is Dave Hartnett going to comment on this case? KinsellaTax seek clearer guideline to overall HMRC policies . . .

Judge Peter Collier QC from Leeds Crown Court slammed HMRC for their ‘secret policy’ which allowed fraudsters to escape prosecution who may have cheated the Revenue by taking advantage of a scheme to allow disabled people to buy cars free of VAT.

A case against nine defendant facing conspiracy charges collapsed at Leeds Crown Court on Monday after the decision by HMRC to not prosecute. The defendants were suspected of plotting to buy cars free of VAT and then sell them on for a profit. It is believed that expensive cars, such as a Rolls Royce, were bought under the disability scheme.

The fraud involved the defendants buying the cars free of VAT under the disability scheme and then selling on for a profit. The more expensive the car, the more VAT was not paid. For a Rolls Royce, the difference would have been £48,000.

An investigation and prosecution, costing almost £500,000, was launched against the defendants by the police and the Crown Prosecution Service who were unaware of HMRC’s policy.

Mark McKone, prosecuting, told Leeds Crown Court that two of the defendants had already, effectively, been given immunity against the charges.

“It became clear through disclosure that at the time these alleged offences had taken place HM Revenue and Customs had a policy in place not to prosecute people for these offences.”

Apparently, one reason for this is ‘this offending was so widespread the Department concluded it was impossible to prosecute all those involved’.

After discharging the defendants, Judge Peter Collier QC said that HMRC policy “effectively decriminalised conduct which on any view, if proved, amounts to a serious fraud on the revenue”.

He added his first concern was “that such extensive and apparent criminal activity should be the subject of a secret policy not to prosecute” and “Second I am concerned that such a policy was not known to other investigating and prosecuting agencies – particularly the police and the CPS, who in my judgement are beyond any criticism in this case. It was effectively a secret policy.”

Judge Collier said that he hoped the recent merger of the Crown Prosecution Service and the Revenue and Customs Prosecution Offices would serve to ensure that all investigators of crime would have a clear understanding of prosecuting policies before embarking on widespread enquiries.

Tory Shadow Attorney General Edward Garnier has said the case has revealed ‘a terrible state of a affairs’ within HMRC and has vowed to take the case up with the Director of Public Prosecutions, Keir Starmer.

The prosecution said that since the last court hearing, permission had been granted to HMRC to change the charge to one of evading VAT. However, the position involving two of the defendants was then uncovered; immunity due to them having entered into a ‘civil recovery agreement’.

Prosecutors then felt the case could not go ahead as, in law, they could not be prosecuted for the same offence twice.

Chief Executive of the TaxPayers’ Alliance said:-

“It is staggering that major Government agencies could be so bad at communicating with each other.

This odd decision and the policy of keeping it secret have cost taxpayers a fortune that we cannot afford. It should be straightforward and standard practice for the CPS and tax authorities to talk to each other about these important issues.

If they had bothered to do so earlier on, we could have saved all of this waste.”

HMRC, however, declined to comment.

WHY? We are entitled to know.