Powers consultation: HMRC seeks rights to visit your home

Stephen

The MLR 2007 are an extension of the MLR 2003 (meaning that they go further, they are not simply a rewrite or continuation of the previous regulations). However most of the MLR 2007 provisions have their seeds in the MLR 2003.

For example reg 15 of MLR 2003 allows an officer to enter and inspect premises at any reasonable time. Reg 15 applies only to money service businesses and high value dealers. The equivalent in the draft MLR 2007 applies to any business in the regulated sector - which of course includes "external accountants".

In fairness there is a limit on the proposed new provision in MLR 2007 which you did not quote:-

"(3) An officer may exercise powers under this regulation only if the information sought to be obtained as a result is reasonably required in connection with the exercise by the Authority, the Commissioners or the OFT of their functions under these Regulations."

David
www.MLROsupport.co.uk

I totally agree with the previous comments and a petition must be lodged to protect the protocols of the European Convention on Human Rights even if the current UK government is prepared to so apparently dishonour its signature thereto. However I understand that the current UK government have already sneaked through legislation providing the combined authorities with over 260 ways of invading "an Englishman's castle" and thereby threatening his privacy and human rights.
Other countries have sadly experienced the draconian powers of OGPU, the KBG & the Gestapo - will this government through the guise of HMRC now be the UK's scourge?
What is this country coming to? Where will this intrusive legislation all end? Why must the authorities brand the majority with the misdemeanours of the minority? I am certainly not looking forward to being around in a few years time if this is a UK blueprint!
"Those who would give up essential liberty to purchase a little temporary safety deserve neither liberty nor safety" ...Benjamin Franklin (1706-1790).

How many various officials can now turn up at your doorstep and demand right of entry?

There is no standard form of Id that is supposed to be presented and so presumably any criminal can turn up at your doorstep with a laser-printed letter that was purportedly sent to you and force their way into your home under a false threat of imprisonment or a fine.

What sort of society have we built where all officials are treated as if they are pure and infalliable and all the general public are treated in law as if they are out to deceive and defraud the Government?

This government is successfully moving us towards a police state by stealth; successive laws reducing our freedom are passed because they are given no publicity, and the public does not hear about them.

Is it not the responsibility of the profession to mount a public-awareness campaign to ensure the government loses votes over this?

Why should not the general public have this? We are having it anyway. Look at Regulation 32, ML Regulations 2007, this is just for the regulated sector, including us!

Reg 32 - Entry, Inspection without a warrant etc.

(1) "Where an officer has reasonable cause to believe that any premises are being used by a relevant person in connection with his business or professional activities, he may on prodcuing evidence of his authority at any reasonable time-

(a) enter the premises
(b) inspect the premises
(c) observe the carrying on of business
(d) inspect and recorded information found on the premises
(e) require any perosn on the premises to provide an explanation of any recorded information

(2) An officer may take copies of, or make extracts from, any recorder information found under paragraph 1."

This is your monitoring visit under the new regs, for 40,000 firms it will be done by HM Customs who already have the necessary powers, including prosecution . Anything who thinks the new Regs is just going to be a continuation of the old is in for a bit of a shock. We actually have to do something this time and prove to a supervisor accordingly.

Steve O'Neill
Business Tax Centre Ltd

Sport and the royal family can always be relied on by the government to distract us from attacks on our freedom.

almost all civil liberties have been eroded - has it made this country a better safer place ....... has it hell

proportionality went out the door years ago ... just think about the MLR and lack of a deminimis level - so many of these policy staemenst turn out to be a complete waste of time and often a disaster. will people never learn

How do we, as concerned citizens, stop this? This is reprehensible, to be allowed to search without warrent and without prior arrangement. Sure, advance warning could allow the odd laptop to be conveneintly removed offsite prior to an inspection visit. But even if the HMRC is able to uphold this in regards to homes of people closely affiliated with a business, the basic human rights of every single one of the people resident in that household who are not owners of the business are being infringed.

I expect this attempt will be thwarted by the people of this country.

Tony - I disagree with your statement that a petition must be lodged to protect the protocols of the European Convention on Human Rights. This government loves petitions and encourages them via its web site; it flushes out dissenting opinion, and shows them where to direct the propaganda effort (cf Mao Zedong's Hundred Flowers Campaign). Public information is the only way to fight these attacks, and it is what this government fears most, hence Blair's massive and unprecedented emphasis on spin and propaganda.

Richard, with regard to HMRC's case failing in court, who wants to have to go to court every time HMRC wants to intimidate you? They will use the powers, and if they fail in court, who has lost? Not the inspector, who does this for a living, but the taxpayer who has to fit the case in around the rest of his life. Most people will give in rather than fight through all the courts

As far as New Labour attacking our civil liberties under the guise of HMRC goes, Tony, its not just HMRC; there is a young lady who now has a criminal record for going to the Cenotaph and reading out the names of people who have died in Tony Blair's wars thanks to New Labour's new "anti-terrorism" laws; there are people imprisoned in US torture centres thanks to new Labour giving away our sovereignty in exchange for a lucrative lecturing career in the US for Tony Blair; when ID cards are in, police will be able to pick and choose who they prosecute for not carrying them. Only HMRC? Far from it.

We need the profession to use our membership fees to publicise and fight this issue for us.

Unless used in the most serious of cases I don't think this power would survive a legal challenge under Article 8 ECHR - right to private life - and might also violate article 6 - rights re a fair trial. There was a case in about 1993 involving French customs - Funke - and looking at that one reason why it was held Article 8 was breached was because customs powers were just too wide for them to be proportionate for the aims for which they were to be used. Of course begs the question of why a government which made so much of enshrining the ECHR in domestic law through the HRA 1998 has since gone out of its way to breach those rights in numerous instances....

Stephen

I think we are in danger of inadvertantly hijacking Nichola's thread.

You and I are dealing with powers of "an officer" under the proposed Money Laundering Regulations 2007 to enter premises which he believes are being used for a business within the 'regulated sector' for the purpose (only) of checking whether relevant money laundering requirements are being observed and gathering evidence in that connection.

Nichola is, I think, dealing with proposed powers of HMR&C in relation to compliance with tax legislation and other legislation 'policed' by HMR&C (such as that relating to drug trafficking, smuggling, duty evasion, etc). In essence I understand her point to be that powers which are appropriate to dealing with suspected drug traffickers may not be appropriate to dealing with a suspected unbalanced cashbook at your local corner shop. (I think she has a point.)

David

Well, here's my scenario;

There's likely to be two of them, as I don't think they travel alone when making house calls especially if they are visiting a woman on her own, and they turn up on my doorstep seeking access because I run a small business from home. For a start - no-ones home, because the business is such that we're out all day, so they'll just have to come back in the evening or at the weekend (ha-ha!). (Are they entitled to force entry ?--------comments please - and watch out, the cat is very badtempered and doesn't like strangers, and I cannot be held responsible for her actions (unlike a dog, apparently))

If, by some fluke, I am home, I would quite properly ask to see identification, and then, never having seen these ID cards before, advise them that I was not convinced of their authenticity and phone the police to say that two very dubious looking characters were attempting to obtain access fraudulently to my home - and being alone and there being two of them, I was now fearful of my physical safety - a raised voice, a scream or two - what do you think?

Of course you have to realise that what with all the centralisation of police call centres, the person answering this call is at least 100 miles away, has no idea who I am, or where I live, even if I give them the address. So, the police are 1) not likely to come at all 2) if they do say they will attend are unlikely to find the address and since the centralised call centres do not pass on contact details, cannot phone me direct to find out whats going on or 3) are likely to take up to two hours or more to get there.

During which time, of course, my uninvited callers can just wait on the doorstep in the pouring rain and wind with no shelter in sight.

Anybody care to take up the story................. or can anyone suggest a better way apart from not letting the demented control freaks get this passed in the first place

For those who seem to be getting fanciful ideas of how not to comply to section 32 Ml Regs 2007 (see previous posting) we had better warn you of S33

Entry to premises under warrant

33.- A justice may issue a warrant under this paragragh if satisfied on information on oath given by an officer that there are reasonable grounds for believing that the first, second or third set of conditions is satisfied.

(4) The third set of conditions is-
(a) an officer has ben obstructed in the exercise of his powers under regulation 32; and
(b) that there is on the premises specified in the warrant recorded information or cash which could be inspected under regulation 32(1)(d)

It goes further into depth, but basically the gist of it is failure to comply with say production orders or a compliance visit could lead to one of this being issued. They are more commonly known as 'search and seizure' orders They could in these circumsatnces get a couple of big coppers who will smash down your door and they will then seize want they deem necessary without consideration whether it is legally privileged information. Oh, they are allowed to use force as may reasonably be necessary.

It would seem very foolish to me to find ourselves in this situation like this over a simple compliance visit

Steve O'Neill
Business Tax Centre Ltd

Most interested to hear about other powers, so it was a good sort of deviation as it goes, and your summary gets things right on track.

Hi David

I am finding it harder and harder to separate all the individual pieces of legislation, there is no doubt in my mind that Government is starting to have joined up thinking when it comes to recovery of proceeds of crime, we have the new civil recovery of fraud legislation, SOCPA 2005, the merger of ARA with SOCA, the ability of ARA to assume the powers of HM Revenue and issue S29a notices for discovery assessments, ML Regulations 2007 and so on and so forth. Tax evasion is a major crime. As with anything else we have the no diminimus limit within POCA 2002, so it would be hard in new legislation to give a diminimus limit. I would agree that the Revenues powers would be seen to be abused for visits concerning cash book balances.

You said yesterday that Chancellor Brown was probably fed up with having his taxes evaded and that Prime Minister Brown will be doing something about it, I agree. We are about to be regulated to the hilt for ML, it is nice to think that those people who actually have caused us to be in this situation, e.g. the criminal and the tax evader may be placed in a similar situation to us and hopefully relieve some of the pressure from the professional, but in order for that to happen and allow the Revenue the power to enforce SOCPA 2005 etc, then new secondary powers are necessary.

I would suggest that somewhere in the proposals will be something on the lines of 'reasonable suspicion' to justify a visit or information received, unlike us who have to have one no matter what.

Steve O'Neill
Business Tax Centre

HMRC's Spring Departmental Report tells us:
"The Home Office Serious Crime Bill includes a clause to extend surveillance powers, inherited from the former HM Customs & Excise to apply to former Inland Revenue matters, subject to the same tight controls and safeguards. Subject to the Parliamentary process and Royal Assent, this will enable these powers to be applied consistently in
criminal investigations across HMRC."

That seems logical, if serious crime is suspected, then it is completely fitting to have appropriate powers, as per the Serious Crime Bill. To have the power to demand entry because you are suspcious of a bookkeeping error is quite another thing.

....but not quite as worrying as the Athens game on Wednesday. Sorry, i can't quite concentrate at the moment.....forget lobbying against anything..........it feeds the egos of those in power. Just emigrate.

This is all about those who have a choice when it comes to paying taxes, the self-employed, self-assessed and the demise of the Great and the Good.

This government is taking advantage of the fact that we do not have rights under a modern written constitution but have Civil Liberties given to us by the Crown. The Civil Liberties we have are part of our Constitution as written down but in several parts over several centuries that nobody can actually recall.

The Americans on the other hand have the Fourth Amendment that concerns itself with government searches and seizures that are reasonable and supported legally by probable cause. It was inspired by actions of the Crown. We have no such protection in law as a right.

The Treasury is a principle cause of lost Civil Liberties. It got its teeth when the Chancellor demoted tax offences from Crown Court to Magistrate level. The current situation is one where any person falling foul of HMRC is a criminal. The most recent example of such are the 37,000+ people who were overpaid tax credits and have found themselves in court for non repayment. Villains every one of them and its all their fault!

Can any of these 37,000 collectively or otherwise sue HMRC for compensation or damages? The answer is no and this has been established by case law. What evidence would lead to a search or seizure? You would never find out unless you ended up in court.

What I find particularly sinister about what is happening is that being fully aware of its actions the government continues to press people harshly on Civil Liberties. If it continues into the future it will lead to the abolition of the Monarchy and the adoption of a modern written constitution.

There is however another perspective and it’s that they don’t really know what they are doing because Civil Liberties are not defined. In either respect the status quo is continually under pressure and showing its age.

Perhaps writing to your MP or Tom Wilson, Clerk to the Constitution Committee, House of Lords, London, SW1A 0PW about what you feel is happening is something you should do sooner rather than later.