'Tough guy' taxman may be on way By Harriet Meyer
Daily Telegraph (Filed: 24/01/2005)
Businesses under investigation by the taxman could face 'seizing and entering' procedures without a court order after the merger of the Inland Revenue and Customs & Excise.
Currently, the Revenue has to satisfy a judge before it can obtain a warrant to enter premises, whereas Customs & Excise does not have to do so because it has greater powers to search and enter. But accountants fear that the Revenue's powers could become "more draconian" from April 1, when the merger is due to take effect.
Mike Warburton, of accountants Grant Thornton, said: "The seizing and entering powers of Customs & Excise stem from its role of catching smugglers. There is a general assumption that we are all smugglers but have just not been caught yet. Customs & Excise has the power to enter and seize documents and goods, but it is much more difficult for the Inland Revenue to do so.
"My fear is that, following the merger, they would average up the powers, meaning the Inland Revenue would inherit more powerful procedures rather than Customs & Excise giving them up. This is unlikely to have an impact on the general taxpayer but could have a big impact on businesses under investigation."
Chas Roy-Chowdhury, head of taxation at the Association of Chartered Certified Accountants, said: "We need to make sure Customs & Excise's draconian powers are not melded into the Revenue. They need to be modernised and in many cases decreased.
"If an election intervenes in the middle of the consultation period we need to ensure that after the election the powers are scrutinised and best-practice procedures are adopted. In my view, this would be a lower level of search powers than Customs & Excise currently has, so they are in keeping with a modern streamlined fiscal authority."
John Whiting, of accountants PricewaterhouseCoopers, said: "There are pluses to the potential effect of the merger, with the combined force of the two working with a common plan and direction to pursue tax evaders, and it is in our interest to have taxes collected properly. However, given that the two halves have such uneven powers there needs to be a proper review of them, and they need to be balanced out."
A spokesman for the Revenue said: "This is pure speculation and none of the legislation is in place. We cannot pass any comment until the rules are up and running."