HMRC have a remit to search for people in positions of authority and to make examples of them as a lesson to future tax evaders (Dave Hartnett Acting Chairman HMRC, House of Commons Committee of Public Accounts, 11th June 2008).
The fact that Tax Agents and Lawyers earn a living giving tax advice to clients and interpreting the cheapest way of having their clients pay the right amount of tax, is it not very dangerous when HMRC can arrest people in those positions for doing just that?
If HMRC arrest a tax adviser then HMRC must expect the tax advisers business will suffer, if not fail, as a result of the arrest and in a fairly short period of time. At the same time the investigation into the tax adviser can take anything up to two years with a very good possibility of no charges being made in the end.
The result would be the forced closure of a business by HMRC with no legal redress as it is unlikely that the owner will have the funds to mount any legal action.
Whilst the arrest of the individual is often just for the day whilst bail is organised, the sentence is one which hangs over that business destroying its ability to continue trading for as long as the investigation is on going.
What is even worse is that currently whilst the individual may have been arrested, HMRC only have to say what it is they are being accused of if they choose to raise charges. One could be arrested, released and have your business taken away from you and be none the wiser as to why. If this isn't a recipe for a bit of abuse of power I don't know what is.
It reminds me of an old judicial process we had of the use of the ducking stool. If they drown then they are innocent if they survive then they are guilty and should be burnt at the stake.
Are we not a little more developed than that? Obviously not.
Why is this idea important?
To prevent a polarisation of tax payers and tax collectors. By allowing abuses of power such as arresting tax agents, destroying businesses and all with the possibility of having no charges ever made, HMRC will become an organisation to avoid doing any business with.
The more entrenched HMRC becomes in its police state powers the more the press and the outside world will dine out on the mistakes and abuses of power. David and Goliath stories will dog HMRC for years as the press loves an underdog. Furthermore HMRC will find it increasingly difficult to successfully prosecute these types of cases as the Jury will be notably biased against the heavy handed approach.
Everyone jokes about no one liking a tax collector but with these new powers going unchecked you can guarantee people will begin to hate them and that will not do society any good at all.