House of Commons - Explanatory Note
Commissioners For Revenue And Customs Bill - continued          House of Commons

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Schedule 3: Revenue and Customs Prosecutions Office (RCPO)

277.      Paragraph 1 sets out the qualification for appointment of the Director RCPO: the person to be appointed must have been in practice as a solicitor or barrister for at least 10 years, reflecting the seniority of his position. A similar qualification is required for appointment as the Director of Public Prosecutions.

278.      Paragraph 2 provides for the Director to hold and vacate office in accordance with the terms of his appointment.

279.      Paragraphs 3 to 5 set out the arrangements for the financing of the Office. Paragraph 3 stipulates that the Director shall be paid such remuneration, expenses and allowances as the Attorney, with the approval of the Minister for the Civil Service, shall determine. Paragraph 4 obliges the Director to follow directions issued by the Attorney with the consent of the Treasury in incurring expenditure to carry out the functions of his Office. Paragraph 5 provides that this expenditure shall be paid out of money provided by Parliament.

280.      Paragraphs 6 and 7 stipulate that after the end of each financial year the Director must provide an Annual Report to the Attorney General which will be published and laid before Parliament. The Report will contain details of the exercise of the Director's functions during the proceeding year. With the exception of the first financial year, which begins when clause 30 comes into force, a financial year is defined as beginning on 1st April and ending on the following 31st March.

281.      Paragraph 8 makes it clear that both the Director and his staff will be Civil Servants.

Schedule 4: Consequential amendments

282.      This schedule sets out the amendments to Acts identified as necessary as a consequence of the creation of the new department, the abolition of the old departments and the creation of the new prosecutions office.

283.      The general provision in clause 45 is necessary as well as the specific amendments set out in Schedule 4 in order to ensure coverage of all references in the very large body of legislation covering the business of Customs and Excise and Inland Revenue.


284.      The integration of HM Customs and Excise and the Inland Revenue into the new department, HM Revenue and Customs will lead to initial costs of around £75 million over the two financial years 2004/2005 and 2005/2006. The cost of transferring Inland Revenue's prosecution function to the new Revenue and Customs Prosecutions Office is estimated to be around £240,000.


285.      There will be a net reduction of approximately 3,200 posts as a direct result of the integration.


286.      A regulatory impact assessment (RIA) was undertaken which concluded that:

  • the new department should be established as soon as possible, through an early, short Bill containing the key provisions essential to create it and enable it to be effective. The RIA took account of the results of a consultation exercise, a Small Firms' Impact Test, a Competitions Filter, and cost / benefit analysis, which indicated that an integrated revenue department will lead to an overall reduction in compliance costs for customers and will improve compliance generally, so increasing flow of revenues. A short early Bill will enable work on realising these benefits to begin sooner; and

  • the Bill should include clauses which establish the legislative authority for the existing independent prosecuting office for Customs and Excise (CEPO) 7, bringing Inland Revenue prosecutions within its functions, and giving the office a new name, the Revenue and Customs Prosecutions Office.

7 See also the review of criminal investigations and prosecutions conducted by HM Customs and Excise by the Hon. Mr Justice Butterfield.

287.      A copy of the RIA has been published alongside this Bill and copies placed in the libraries of both Houses of Parliament.


288.      Section 19 of the Human Rights Act 1998 requires the Minister in charge of a Bill in either House of Parliament to make a statement about the compatibility of the provisions of the Bill with the Convention rights (as defined by section 1 of that Act). The Chancellor of the Exchequer made the following statement:

  • "In my view the provisions of the Commissioners for Revenue and Customs Bill are compatible with the Convention rights.".

289.      The Bill transfers existing functions of the Inland Revenue and Customs and Excise to HMRC and establishes an independent prosecution office (RCPO) to prosecute offences investigated by HMRC. Her Majesty's Revenue and Customs will continue to be a non-ministerial government department, like its predecessors. The transfer of functions, without the substantive amendment of the underlying functions, does not engage the Convention rights.

290.      The Bill makes provision for the internal sharing (pooling) and disclosure of information held by HMRC in clauses 16 to 19 and the disclosure of information held by Her Majesty's Inspectors of Constabulary (clause 25) and the RCPO (clause 36). It is considered that these provisions are compatible with the Convention rights and in particular article 8 (which protects private life, family, home and correspondence). The Bill sets out a clearly defined statutory framework, which will ensure that the use and sharing of information by HMRC, the RCPO and Her Majesty's Inspectors of Constabulary will be no more than is necessary in the interests of the economic well being of the United Kingdom, for the prevention of crime or for other public interest reasons compatible with Article 8. In order to ensure compliance with the statutory framework the Bill introduces statutory duties for officials of HMRC, the RCPO and Her Majesty's Inspectors of Constabulary to keep confidential taxpayer and other customer information acquired in the course of their duties; and criminal offences in respect of unauthorised disclosure of information.

291.      The Bill makes provision relating to criminal offences for assaulting, impersonating or obstructing a HMRC officer in clauses 26 to 28. This replaces provision in the Inland Revenue Regulation Act 1890 and the Customs and Excise Management Act 1979. It also provides for the arrest of persons suspected of committing etc. such offences in clause 29. The processes in the UK criminal justice system will ensure that the investigation and prosecution of these offences are compatible with Article 6 rights by ensuring that the individual has a fair trial.

292.      Overall the measures strike the correct balance between the demands of society and the rights of the individual.


293.      The Bill will come into effect at a date to be appointed by commencement order.


CEMA          Customs and Excise Management Act 1979

CEPO          Customs and Excise Prosecutions Office

CPS          Crown Prosecution Service

CRC          Commissioners for Revenue and Customs

DPA          Data Protection Act 1998

DPP          Director of Public Prosecutions

DVLA          Driver and Vehicle Licensing Agency

EADA          Exchequer and Audit Departments Act 1866

GRAA      Government Resources and Accounts Act 2000

HMCE          Her Majesty's Customs and Excise

HMIC          Her Majesty's Inspectorate of Constabulary

HMRC          Her Majesty's Revenue and Customs

HRA          Human Rights Act 1998

IPCC          Independent Police Complaints Commission

MOCA      Ministers of the Crown Act 1975

MP          Member of Parliament

NAO          National Audit Office

NMW          National Minimum Wage

PACE          Police and Criminal Evidence Act 1984

PAYE          Pay as you earn

POCA          Proceeds of Crime Act 2002

RCPO          Revenue and Customs Prosecutions Office

RIA          Regulatory Impact Assessment

RIPA          Regulation of Investigatory Powers Act 2000

TMA          Taxes Management Act 1970

VAT          value added tax

VOA          Valuation Office Agency

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Prepared: 25 November 2004