Memorandum submitted by the Inland Revenue
The Committee asked us for a short memorandum
on three issues.
1. What are the particular difficulties of
conducting investigationsboth standard and "special"in
Northern Ireland, and the approaches which have been or might
be adopted to address these circumstances?
Tax investigations in Northern Ireland are conducted
either by our local tax offices or by our Special Compliance Office.
Local tax offices normally handle tax investigations,
but senior officers in the Northern Ireland Region would be made
aware of difficult or sensitive cases as they arise and as they
become progressively harder to handle. As in other regions, the
Inland Revenue select cases for investigation after a risk analysis
process and these are normally handled by local Inspectors as
a precursor to being referred to the Special Compliance Office
if necessary. No caseworker is expected to be able to deal with
particularly sensitive matters on their own and our procedures
allow advice to be sought on how best to deal with specific points.
Cases will be referred to Special Compliance Office to handle
where the nature or complexity of the issues demand it.
Special Compliance Office are responsible for
the investigation of suspected tax avoidance and tax fraud, in
the more serious or complex cases. They also undertake all of
the Inland Revenue's criminal investigations of tax and tax credit
fraud. They operate from nine offices around the United Kingdom
but they do not have an office in Northern Ireland.
Cases appropriate to SCO which derive from Northern
Ireland are handled in their Manchester and Liverpool offices.
Those offices also deal with cases from elsewhere. The selection
of cases to be investigated by SCO is exactly the same for Northern
Ireland as for the rest of the United Kingdom. The same quality
and tax risk assessment criteria are used.
Staff are not compelled to work on Northern
Ireland cases and they are made aware of the sensitivities of
the situation on appointment to any post which involves such work.
Various security measures are taken to reduce the profile of investigators
who visit Northern Ireland and meetings are usually held in Inland
Revenue offices or known accountants' offices. Visits to Northern
Ireland are restricted or suspended at certain times of the year
and in periods of raised tension. There have been no instances
of threats to staff in recent years.
SCO investigators work closely with their colleagues
in tax offices in Northern Ireland and often call on their local
knowledge for guidance in security matters. Mechanisms are also
in place to check any suspicions about paramilitary links of any
particular taxpayer. Where such links are confirmed by the Police
Service of Northern Ireland, SCO take their advice on the appropriate
course of action. The same procedure is adopted by criminal investigators
when considering visits to potential witnesses. Criminal investigations
are undertaken with the assistance of the Police Service of Northern
Ireland in the execution of search warrants.
2. Whether, and if so what, human and financial
resources are available to the Organised Crime Task Force through
the Inland Revenue?
As we understand it, the role of the Organised
Crime Task Force is to be a high level, facilitating group and
not an operational one. A Deputy Director from our Special Compliance
Office attended the last meeting of the Task Force in advance
of the establishment of information gateways under the Anti-Terrorism,
Crime and Security Act. The new information disclosure powers
in the Act allow the Inland Revenue to disclose information to
other authorities to assist in the fight against terrorism and
other crime. The Deputy Director will take up a seat on the Task
Force at the next meeting thereby recognising the Inland Revenue
joining the Task Force. The SCO Criminal Investigation Group Leader
responsible for Northern Ireland has attended Task Force sub-committee
meetings and had discussions on how SCO might work with the Task
Force on appropriate cases, in addition to the provision of information
to Task Force members under the provisions of the Act. This is
expected to be on a similar basis to that adopted by other members
of the Task Force, principally Customs and Excise.
3. What human resources will be allocated
by the Inland Revenue to the Northern Ireland division of the
Assets Recovery Agency, and what roles will those personnel fulfil?
We understand that the ARA will have an office
in Northern Ireland but the staffing of the Agency as a whole
is only now coming up for discussion. In particular, the basis
on which Inland Revenue staff might be seconded to ARA is under
consideration. A Project Board is being set up to oversee the
establishment of the Agency and an Implementation Group to oversee
the implementation of the Proceeds of Crime Act. We will be liaising
with both of these bodies and will be considering with them the
staffing question both nationally and in Northern Ireland in particular.
25 January 2002