Home AffairsWritten evidence submitted by Neil Coggins [IPCC 32]

HMRC and the IPCC—is the IPCC Effective in Oversight of HMRC?

Summary

1. Ms Lin Homer (HMRC Commissioner and Chief Executive) became aware that I had made a complaint alleging breaches of UK tax legislation and also fraud by false representation (as defined in the Fraud Act 2006 s2) on 9 July 2012.

2. On (or possibly before) 13 August 2012, Ms Homer became aware that HMRC Internal Governance Civil Investigations had independently established that legislation had been breached, and that there was consequently a real risk of fraud having taken place.

3. Regulation 28(1)(b)(v) of the Revenue and Customs (Complaints and Misconduct) Regulations 2010 (henceforth referred to as “the Regulations”) requires that a complaint be referred to the IPCC if that complaint alleges “a relevant offence”.

4. Regulation 12 makes it the duty of the HMRC Commissioners to ensure that they are kept informed of any obligation to act that arises under the Regulations that has not been complied with, or has been contravened, by HMRC.

5. Regulation 28(3) bestows personally upon the Chief Executive an obligation to refer a complaint of a relevant offence if satisfied that the complaint contains an indication that either a criminal offence may have been committed or that if the allegation was proved would result in disciplinary proceedings against the person about whom the complaint was made.

6. Given that HMRC’s own investigation established that legislation had been broken, and that if the allegation of fraud was proven it would result in dismissal of the person about whom the complaint was made (since they would have a criminal record for fraud and a potentially lengthy custodial sentence to accompany it), the Chief Executive (having been appraised of this fact, irrespective of her statutory duty to be kept informed of the matter) had an obligation to refer the matter to the IPCC.

7. Ms Homer failed to refer the matter to the IPCC within the deadline required by Regulation 28(6).

8. The HMRC Commissioners only “decided” to refer the matter to the IPCC upon threat of judicial review, some 3 months after the statutory deadline had elapsed.

9. The IPCC Commissioner Sarah Green was asked to decide whether to “call in” the complaint (i.e. to utilise the IPCC powers conveyed by the Regulations under Regulation 28(1)(d)).

10. Despite having before her evidence that the complaint was required to be referred to the IPCC under Regulation 28(1)(b)(v), Ms Green elected not to require the complaint to be referred to the IPCC.

11. The reason cited by Ms Green was that HMRC had already performed a detailed investigation.

12. Regulation 22 expressly prohibits HMRC from being allowed to handle the complaint internally because of the already-established applicability of Regulation 28.

13. Therefore IPCC Commissioner Sarah Green was herself operating in direct contravention of the Regulations by intentionally allowing HMRC to not refer the complaint and allowing a breach of the Regulations to go unchallenged.

14. Based upon these facts, I submit to the Committee that immediate steps should be taken to instruct the IPCC to put in place more rigorous mechanisms to detect and call in complaints that are supposed to be reported to them, and to impose sanctions (including disciplinary and/or criminal proceedings) against HMRC IGCI staff who fail to adhere to the legislation, given the sensitive nature of the role they are entrusted with.

15. I further submit that HMRC CEO Lin Homer utterly failed to adhere to the Regulations despite having ample opportunity to do so, and that the Committee should seek to ascertain the continued suitability of Ms Homer for the position she demonstrably is failing to meet the demands of.

16. I further submit that IPCC Commissioner Sarah Green should be the subject of an investigation into this breach of the Regulations, and be called to explain why, when faced with evidence that HMRC are failing to adhere to the Regulations, she chooses not to involve the IPCC or take any steps to ensure the rule of law and fulfil the ultimate duties of her position.

Supporting Information

17. On 15 May 2012, I made a complaint to HMRC IGCI that an HMRC tax officer had failed to adhere to both HMRC guidance1 and enacted tax legislation.2 I further alleged that the tax officer had consequently committed an act of Fraud by False Representation, as defined in the Fraud Act 2006 s2.

18. The crime of Fraud by False Representation carries a maximum custodial sentence of 10 years, and is both a “serious arrestable offence” and a “relevant offence”.

19. The requirement of legislation and IPCC statutory guidance is that any police force or police authority must, upon receipt of an allegation of a “serious arrestable offence” or “relevant offence”, report the matter to the IPCC no later than the end of the working day following the receipt of the allegation.

20. On 5 July 2012, HMRC IGCI attempted to close the investigation down, stating that “no evidence had been found or provided by [me] to support the allegation of fraud”. Upon telephoning the Senior Investigations Officer that wrote the letter, he confirmed verbally that “Civil Investigations lacks the requisite expertise to determine whether or not the law was broken”, and also “no contact had been made with other parties who had the necessary expertise to assess the merit of my case”.

21. At this time, my allegation of fraud had not been reported to the IPCC.

22. I emailed the SIO, Cc’ing my MP Lindsay Hoyle and the CEO of HMRC Lin Homer, restating his comments. His response was to initiate contact with relevant experts within HMRC to assess the merit of my complaint.

23. On 13 August 2012, the SIO wrote to me again, confirming that both HMRC guidance and tax legislation had indeed been breached. He also stated, however, that there was no evidence of “deliberateness” on the part of the HMRC tax officer, and consequently there would be no action (either disciplinary or criminal) taken against the tax officer.

24. At this time, my allegation of fraud had not been reported to the IPCC, despite HMRC now having established that the law had indeed been broken in at least one respect.

25. I submitted a complaint to the IPCC, asking them to “call in” the complaint, and making them aware of the fact that it pertained to a “relevant offence” as defined in both the IPCC Statutory Guidance 2010 and the Regulations.

26. The IPCC Casework Manager submitted a recommendation to not call in the complaint on the basis that she hadn’t found sufficient evidence to warrant the IPCC’s involvement. However, it was made entirely clear that the IPCC Casework Manager had trusted implicitly statements provided to her by HMRC that were at best misleading and at worst materially false. Furthermore, she had failed to acknowledge that HMRC had failed to report a relevant offence in the first place. Finally, she had also made numerous mistakes that may have unduly influenced the Commissioner’s decision to not call in the complaint.

27. The Regulations are very clear that allegations of a “relevant offence” must be referred to the IPCC if there is “an indication” that a criminal offence “may” have been committed or if the behaviour alleged (“if it had taken place”) would justify the bringing of disciplinary proceedings likely to lead to termination of the person’s employment. There is no burden of proof required by the Regulations in order for the referral of “relevant offences” to be mandatory.

28. Since the referral was required by the Regulations, the actions of the IPCC staff involved in the decision to not call in the complaint are complicit in the HMRC’s breach of the Regulations by not referring the complaint. That includes the IPCC Casework Manager, the IPCC Head of Casework, and the IPCC Commissioner.

29. Upon my commencement of pre-action protocol for judicial review of HMRC’s decision not to refer the matter to the IPCC, the HMRC Commissioners have now agreed to refer the matter to the IPCC for consideration, on the basis that I have made an allegation of a “relevant offence”, provided that I do not pursue with judicial review.

30. The referral of my complaint to the IPCC was made on 14 November 2012.

Recommendations for action

31. Since HMRC IGCI are failing to act responsibly and in accordance with legislation, the task of “internal” governance of HMRC be given to an independent organisation that can be entrusted to act responsibly and impartially and in accordance with legislation and published guidance.

32. Since the IPCC are failing to enforce lawful behaviour upon HMRC in respect of internal governance, sanctions should be imposed upon the IPCC to compel them (both as accountable individuals and as an organisation) to act responsibly and impartially and in accordance with legislation and their own guidance.

Further evidence

Email from Neil Coggins to the Committee, 19 November 2012

Further to my previous submissions, I can advise the Committee that I have now identified and read the “Revenue and Customs (Complaints and Misconduct) Regulations 2010” (henceforth “the Regulations”).

1.I can—confirm—that HMRC Internal Governance Civil Investigations staff BREACHED the Regulations by failing to refer my complaint to the IPCC (something that the HMRC Commissioners finally overruled when faced with judicial review proceedings).

2.I can—confirm—that IPCC Commissioner Sarah Green WAS aware of the breach of the Regulations by HMRC, but still declined to “call in” my complaint, thereby allowing a demonstrable breach of the Regulations (which she is personally charged with upholding) to stand

I submit to the Committee that an IPCC Commissioner who -officially- permits the breach of legislation by an organisation she is personally expected to provide oversight of is not fit for the post or duties she is entrusted with. I will shortly be filing a complaint with the IPCC Internal Investigations Unit in respect of this matter, and urge the Committee to ask the IPCC leaders it has before it currently to identify whether such behaviour is IPCC policy, and whether Ms Green’s actions are condoned by the IPCC as an organisation.

The IPCC will now be making a Mode of Investigation decision in respect of my complaint as referred by HMRC. I remain hopeful that justice will finally see the light of day, but if the IPCC choose to ignore the law and side with HMRC instead, I will commence proceedings to drag them before the High Court just as swiftly as I did HMRC. To date, HMRC have failed to adhere to legislation on at least four occasions, and there is enough evidence to support at least two criminal prosecutions. With the IPCC apparently following suit, one wonders where it will all end...

Email from Neil Coggins to the Committee, 20 November 2012

Further to my previous correspondence, I have now obtained evidence that I believe proves:

1.HMRC Internal Governance Civil Investigations officers have breached the Revenue and Customs (Complaints and Misconduct) Regulations 2010 (henceforth “the Regulations”), and

2.HMRC Chief Executive Lin Homer has personally breached the Regulations, and

3.IPCC Commissioner Sarah Green personally allowed this breach to go unchallenged, thereby creating a third breach of the Regulations

Please find attached a submission of written evidence in respect of my complaint. In light of the severity of this matter I trust that, whilst the Committee cannot investigate individual cases, it will use its discretionary powers (to call for papers and persons) to determine if such matters as brought to light in my complaint are in fact endemic in the IPCC. To that end, I would welcome a direct communication from the Chair to confirm what actions, if any, the Committee intends to take.

Neil Coggins

November 2012

1 Capital Gains Manual—CG68050.

2 Income Tax (Trading and Other Income) Act 2005, s194.

Prepared 1st February 2013