When does an HMRC raid dawn on you?
3rd May 2017
With the recent, much publicised, fraud investigations taking place at Newcastle United and West Ham United, the use of the dawn raid by HMRC is very much in the news. HMRC can undertake an early morning raid to search premises whenever tax fraud is suspected. The operation involving the football clubs was huge, with around 180 officers deployed across the UK and France – but these operations can vary in size and all have the same impact on the companies involved and all need to be dealt with in a the same way.
Other regulatory bodies such as the Serious Fraud Office (SFO) can also carry out dawn raids but these guidelines but this guide only applies to HMRC raids.
At the outset, although you will almost certainly be caught totally unawares, it is vital to follow certain procedures to ensure HMRC are following the correct protocols
- Check the identity of the HMRC team leader and request that they call your solicitor prior to them starting the search
- Examine the search warrant and send a copy to your solicitor in pdf format.
- Ask that all members of the HMRC search team remain in the reception area of your premises and ensure that members of your staff remain with them. However, it is vital that the officers are not physically obstructed.
The HMRC team do not have to wait for your solicitor to arrive prior to them starting the search – however they can be asked courteously that they delay any further action until they do.
It helps if you can provide a definitive time scale for this to happen, but although it is a perfectly reasonable request they may still refuse. A search warrant will usually limit the time that the HMRC staff are entitled to remain on the premises, so they could well be reluctant to delay the search any longer than is necessary for you to telephone your solicitor.
Should HMRC refuse to wait, it is best to allocate a staff member to accompany each officer of the search team – a record of all documents examined, copied or removed by the HMRC officers need to be kept.
The investigating officers are not permitted to interview or interrogate you or any member of staff at the premises – they have to restrict their questions to immediate issues relating to the search or the whereabouts of documents.
HMRC’s officers are allowed to search anyone on the premises, if they have reasonable cause to believe that a person has material in their possession likely to be of substantial value to the investigation – personal searches may only be carried out by a person of the same gender. They are also authorised to arrest without a warrant, as long as they have reasonable grounds for suspecting that an offence has been committed and if they have reasonable grounds to suspect the person of being guilty of it.
The officers should not be physically obstructed and it is vital that no attempt is made to conceal documentation or information held. These could be arrestable offences.
As documents subject to Legal professional privilege (LPP) are outside the scope of any search warrant, these must be identified at the outset. If an agreement cannot be reached, the documents should be placed in sealed envelopes pending resolution of the issue.
HMRC can also retrieve any stored form of electronic data and has the equipment to enable them to copy it without removing computers from your premises– but they can take them if they wish. If they decided that computers have to be removed it can be months before you see them again, so ensure that you always backup your data.
Peter Hastings comments “An early morning raid by HMRC is a frightening and intimidating experience that will catch companies completely unawares, so the need to consult and involve a solicitor immediately is paramount.
The experienced and knowledgeable HMRC team at Rogers & Norton are fully conversant with the protocols followed by the search teams, so will be able to guide and support you through an extremely difficult situation”