Tax officials' raid unlawful
Posted: 16th December 2013
The High Court has stepped in to vindicate the rights of four members of a family whose homes were raided by tax officials investigating an alleged VAT fraud. The warrants purportedly authorising the officials’ actions were invalid in that they did not comply with the terms of the Police and Criminal Evidence Act 1984 and the Court made a formal declaration that the raids were therefore unlawful.
HM Revenue and Customs (HMRC) had obtained the warrants from magistrates on the basis that there were reasonable grounds for suspecting that a married couple were the 'controlling minds' behind a string of 'phoenix companies' that were said to have been used in a £250,000 fraud.
The couple's 'substantial' home and business premises were entered and searched and the homes of two of their relatives were also targeted. All four family members denied any wrongdoing but electronic equipment and large numbers of documents were seized by HMRC, who had held on to them – but had refrained from examining them – pending the High Court hearing.
HMRC admitted that the warrants were not compliant with the Act in that they were too widely drafted and that all the entries, searches and seizures were therefore unlawful. However, the Court made findings that went beyond that concession and ruled that the family members were entitled to a formal declaration that the warrants were unlawful. The Court found it necessary to quash the warrants in order to achieve proper vindication of their rights.
The Court’s decision meant that the family members were, 'in principle', entitled to have all their property returned to them. However, restoration of the goods was stayed pending the hearing of an application to the Crown Court by HMRC for permission to retain the goods despite their unlawful seizure.