When HM Customs and Excise and HM Inland Revenue merged into a new department called Her Majesty’s Revenue and Customs (HMRC), the Commissioners for Revenue and Customs Act 2005 provided for the appointment of commissioners to commissioners of Customs and Excise.
The act also established a new Revenue and Customs Prosecution Office (RCPO) to prosecute HMRC cases in England and Wales.
It was formed to demonstrate the full independence of the prosecutors, introduced external scrutiny of criminal investigation work and improve standards and effectiveness to make the staff of the office through to the director accountable to the Attorney General.
Decisions are now being passed from Revenue and Customs officers to decide whether or not there is to be a prosecution and are left entirely in the hands of the RCPO who will advise investigators from the earliest possible stage so that the right evidence is collected, the strongest case built and the right charges chosen in the first instance.
Since the merger, HMRC have set up a new Criminal Taxes Unit (CTU) who will work with the police, the Serious Organised Crime Agency and the Asset Recovery Agency to identify those who have amassed wealth from crime but have paid little or nothing by way of tax.
HMRC are considering in more detail how this could be implemented.
Having said that, there has been little publicity about the efforts of the RCPO until now…
Ostensively it was a move by HMRC to combat major criminal organisations in the country.
After convictions they would seek a confiscation order in order to seize assets.
One recent recipient of such an order, who is now in prison, was Mr Adams of the notorious Adams crime family of London.
However, the following article seems to not only be aimed at major criminal organisations but also very ordinary people such as a pharmacist who had over-claimed £464 in VAT and was subject to a confiscation order of more than £212,000.
Well if that isn’t going over the top then I don’t know what is.
So I have reproduced the article which appeared in The Times on Monday 5th October because I want people to see how dangerous it is to actually be prosecuted by this new department which has been in effect only since the act of 2005.
It is a major warning for people involved in value added tax investigations and only, in my view, can a firm like KinsellaTax handle such investigations to at least stem the tide of a prosecution and, possibly, a term of imprisonment and a confiscation order.
One thing I don’t like is, it appears, that Revenue staff are getting bonus payments for meeting asset seizure targets.
When is somebody going to come up with the idea of paying our policemen bonuses for dealing with criminal convictions? It is just totally against the philosophy of trying to deal with such cases.
The Times article reads:-
“Senior prosecution officials have received personal bonuses for seizing defendants’ assets under an incentive scheme which, it is feared, could create miscarriages of justice.
The Times has learnt that £44,000 in bonuses for the ‘most senior staff’ at the Revenue and Customs Prosecution Office (RCPO), which pursue tax fraud cases, were linked in part to hitting confiscation targets.
The prosecution authority also receives 18.5 per cent of the money seized from people convicted of fraud and subjected to confiscation orders. But leading lawyers are increasingly concerned that the setting of targets and provision of financial incentives will, in the words of one, ‘skew justice’.
The Home Office has set the criminal justice system a target for the annual seizure of £250 million of criminal assets by 2010 and wants the figure to rise to £1 billion per year.
Police forces, other law enforcement agencies, prosecutors, the courts and the Home Office itself all stand to benefit financially from convictions which lead to confiscation orders.
In one recent case, 16 people convicted in a £3.2 million VAT fraud conspiracy were each ordered to pay back £3.2 million – a total of £51 million.
In another case a pharmacist who had over-claimed £464 in VAT was subjected to a confiscation order of more than £212,000.
In other cases, where defendants’ assets have been frozen before trial, there have been complaints that they have been hampered in mounting their defence; for example, they have been unable to hire expert witnesses.
Sir Ivan Lawrence, QC, said he was uneasy about ‘manifest injustices’ in confiscation proceedings that were compounded by the setting of targets. Sir Ivan, a former Conservative MP and chairman of the Home Affairs Select Committee, said:-
“Once you start setting targets, you are saying ‘Never mind justice’ Bodies like RCPO have to make a judgement on the cases they pursue – if they make that judgement on the basis that they will receive a lot of money, it calls into question whether justice is going to be done.
There are indications that the Court of Appeal is uneasy about some of these cases, but the astonishing thing is that no one is up in arms about it.”
Criminal Law Week, the respected legal journal, has commented on ‘extravagant claims’ for confiscation which “leave the impression that some prosecuting authorities have abandoned any pretence to fulfil a ‘minister of justice’ role in favour of taking advantage of what they appear to see as a revenue-raising racket”.
The journal has described as a ‘scandal’ the link between the funding of law enforcement agencies and the amounts of money they can confiscate. It added:-
“Targets… from improving the quality of criminal justice, merely serve to corrupt the system.”
The RCPO disclosed to The Times under freedom of information legislation that in 2008/09 it paid almost £44,000 in bonuses to its senior staff who met “agreed, written objectives”.
“In one instance these objectives relate to confiscation of criminal assets.”
Revenue and Customs, which investigates tax and smuggling cases, said it paid £11.5 million in bonuses in 2008/09 to staff of all grades who were judged to be “top performer”.
A spokesman claimed that bonuses were not linked with confiscation activity but did not reveal the criteria under which they were paid.
The Metropolitan Police recovered £18.7 million in confiscation proceedings in 2007/08, of which £9.3 million went to the Home Office, while the force itself received £5 million.
The Home Office believes its Asset Recovery Incentivisation Scheme could be stepped up to earn £1 billion per year for government coffers.
Defence lawyers say that draconian laws to seize the property of big drug dealers are being used to confiscate the family homes of businessmen charged with non-payment of VAT. One solicitor said:
“I have clients whose businesses are being closed and family homes taken away because of complex irregularities in VAT. They’re not organised criminals.”