How the National Crime Agency Uses HMRC Powers to Tackle Criminal Finances
Amongst its powers, when conducting its investigatory and prosecutorial functions, the National Crime Agency (‘NCA’), can exercise a broad range of powers, including certain functions normally associated with HMRC.
It may raise tax assessments and impose penalties against taxpayers, whether individuals, companies, partnerships or trusts, across the full spectrum of taxes including income tax, capital gains tax and inheritance tax.
There is no requirement for a criminal conviction to have occurred. Tax investigations by the NCA are often brought as a last resort to prevent someone from benefitting from criminal conduct and a prosecution is either not possible or has failed.
The relevant legislation is section 317 of the Proceeds of Crime Act 2002 (‘POCA’) and, by way of illustration, the case of Gary John Robb v National Crime Agency [2016] TC 05374, which came before the First Tier Tax Tribunal, upheld tax and penalty assessments raised by the NCA in targeting a known criminal.
John Veale of KANGS comments upon the relevant statutory and case law mentioned above.
The Relevant Statutory Law
POCA states as follows
S.317 The National Crime Agency’s general Revenue functions
(1) For the purposes of this section the qualifying condition is that NCA has reasonable grounds to suspect that:
- income arising or a gain accruing to a person in respect of a chargeable period is chargeable to income tax or is a chargeable gain and arises or accrues as a result of the person’s or another’s criminal conduct, or
- a company is chargeable to corporation tax on its profits arising in respect of a chargeable period and the profits arise as a result of the company’s or another person’s criminal conduct.
(2) If the qualifying condition is satisfied, the NCA may serve on the Commissioners of Inland Revenue a Notice which:
- specifies the person or the company and the period, and
- states that it intends to carry out, in relation to that person or company, and in respect of the period, such of the general Revenue functions as are specified in the Notice.
S. 323 Functions
This section lists at length the general Revenue functions ranging from all the familiar taxes such as income tax, national insurance contributions, corporation tax through to statutory payments such as sick pay, maternity pay and student loans.
‘General Revenue functions’ does not include the power to prosecute offences, which remains at the discretion of HMRC.
The Case in Focus. Gary John Robb v National Crime Agency [2016] TC 05374
As stated above, under POCA, the NCA can assume HMRC’s functions in relation to income tax and NICs where it has reasonable grounds to suspect that a person is liable to tax on income, which has arisen directly or indirectly from criminal conduct.
Robb absconded from his trial for drug offences to North Cyprus where he lived for twelve years. Subsequently, he was jailed in the UK and then extradited back to North Cyprus for imprisonment on fraud charges.
The NCA, known at that time as the Serious Organised Crime Agency, successfully recovered £1.5m arising from his fraudulent property dealings in North Cyprus. He was also assessed for income tax, NICs and financial penalties arising from his prolonged failure to notify on his financial statements.
Robb appealed the assessments which he sought to argue were disproportionate and excessive. The appeal was dismissed on the basis that the NCA was entitled to make the tax assessments, which were valid and reasonable, and that the penalties were not excessive.
How Can We Assist?
The extensive powers of the National Crime Agency (NCA) when investigating criminal conduct are indisputable and demonstrate how the Government seeks to prevent individuals from benefitting from criminal conduct, even where a criminal prosecution has failed or is not appropriate for whatever reason.
Should you become subject to any form of NCA or other enforcement agency investigation it is essential that you seek immediate legal advice and assistance.
The team at KANGS has vast experience representing clients subject to a tax investigation and proceedings involving every aspect of criminal law.
Should you require any assistance, our team will be delighted to hear from you.
Tel: 0333 370 4333
Email: info@kangssolicitors.co.uk
We provide initial no obligation discussion at our three offices in London, Birmingham, and Manchester. Alternatively, discussions can be held through video conferencing or telephone.
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