Wales considers criminal powers to investigate devolved tax crime

The Welsh government is consulting on the criminal investigatory powers to be provided to the Welsh Revenue Authority (WRA) to tackle and deter devolved tax crime, once devolved taxes come into force next year

From April 2018, it will become the responsibility of the WRA to collect and manage landfill disposals tax (LDT) and land transaction tax (LTT), replacing UK landfill tax and stamp duty land tax, which are currently collected by HMRC.

The Office for Budget Responsibility (OBR) forecasts the WRA will collect £288m from LDT and LTT in 2018-19. Receipts from these two devolved taxes are forecast to rise to £365m a year by 2021-22.

The consultation suggests LDT may be at higher risk of attempted fraud than LTT, which is regulated via solicitors and conveyancing agents.

LDT in Wales will differ from UK landfill tax in that it will also be chargeable on waste disposed of otherwise than at authorised landfill sites. Under the existing regime, the disposal of waste can only be taxed where the disposal takes place at a landfill site, which has the correct environmental permit – there are currently 25 such sites in Wales.

However, there are an estimated 60 illegal waste sites operating in Wales. These often appear to be legitimate sites but do not have the relevant authorisations. The Landfill Disposals Tax (Wales) Bill provides for the collection of tax from these sites, but the consultation indicates there may be a need to use criminal investigation powers to pursue cases involving such sites tax is being evaded.

The consultation looks at the need to tackle devolved tax offences through the use of criminal powers; the organisations which may be involved in criminal investigation and prosecution; the practical implications of making use of different elements of UK criminal powers legislation; and ensuring appropriate safeguards and governance on the use of these powers.

The consultation suggests a narrower set of powers than those available to HMRC. For example, powers of arrest and detention are not proposed for the WRA as they are not seen to be necessary or proportionate. However, powers to gain entry to premises and seize information relating to tax crime are. The consultation asks for views on the impact of the WRA being provided with the specific criminal powers proposed.

It also considers whether the WRA should have the power to prosecute devolved tax offences, or whether (as at present) this should be handled by the Crown Prosecution Service.

The consultation ends on 2 October.

Welsh Revenue Authority access to criminal powers to tackle devolved tax crime is here.

Pat Sweet |Reporter, Accountancy Daily [2010-2021]

Pat Sweet was the former online reporter at Accountancy Daily and contributor to the monthly Accountancy magazine, pub...

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