Sharp rise in HMRC raids on property of suspected tax evaders continues

HMRC carried out 445 property raids against individuals suspected of tax evasion over the tax year 2012/13, more than double its historical average number of annual raids. Last year, the number of raids carried out reached a record 499, up from just 199 in 2010/11.

Tax expert Jason Collins of Pinsent Masons, the law firm behind Out-Law.com, said that the increase was needed to help HMRC deliver its stated target to prosecute more individuals for tax evasion. It aims to prosecute 1,165 people for tax evasion in 2014/15, which Collins said would be nearly five times its 2010 target of 250 prosecutions.

"We have seen almost no easing in the pace of HMRC property raids, and arrests are actually continuing to rise," Collins said.

"To keep up with its criminal prosecutions target, HMRC is no longer reserving its tougher tactics for just the very biggest evaders. It is increasingly targeting middle class professionals suspected of cheating HMRC out of smaller sums and so they are increasingly likely to be on the receiving end of HMRC's raids," he said.

Among those arrested by HMRC for suspected tax evasion in recent months are bankers, PR executives, lawyers and tax advisers, Collins said. The department has also recently begun investigating police officers that have not declared external income, and has reportedly written to chief constables to request lists of police officers who have business interests outside of work, according to Collins.

Raids on homes or business premises in order to make arrests and seize evidence of tax evasion are increasingly being used to supplement HMRC's traditional methods of conducting tax evasion investigations, such as prearranged visits, Collins said. These raids are often carried out early in the morning to catch suspected offenders off-guard, or during holiday periods when advisers or staff are more likely to be away.

HMRC teams that carry out property raids have the right to search individuals, and some have the power to make arrests without the presence of a police officer or the need to seek an arrest warrant. HMRC will also aim to seize as many documents and computers as it can as quickly as possible, Collins said.

"Whilst undertaking property raids and on the spot arrests sounds very much like The Sweeney, much of the real hard work in tackling tax evasion is now being made through the data mining of hundreds and thousands of bank records or the forensic analysis of accounts," he said. "But once that process is completed and HMRC feels that it has good reason to raid a home or a business to build up its case then it will."

"Anyone who thinks they can 'beak the system' should think again. HMRC is increasingly finding new and innovative ways of obtaining data - and is signing offshore territories up to 'automatic information exchange'. The places to hide are running out and anyone who has an issue should think about coming clean. HMRC will always treat taxpayers more leniently if they do," he said.