Section 224, Schedule 48: Powers under the Proceeds of Crime Act 2002
Summary
1.Section 224 introduces Schedule 48 which provides for amendments to be made to Proceeds of Crime Act 2002 (POCA). HM Revenue & Customs (HMRC) has criminal asset recovery powers under POCA but for former Inland Revenue (IR) functions the powers can only be exercised by the police on HMRC's behalf. This presents a potential loss of revenue to the Exchequer when HMRC are unable to exercise the powers, for example, during a search when the police are not present. This section and Schedule extend certain powers under POCA so they can be exercised by officers of HMRC in respect of a limited number of former IR functions.
Details of the Schedule
2.The Schedule amends the various references to a ‘customs officer’ in Chapter 3 of Part 5 and in Part 8 of POCA to read “officer of Revenue and Customs”. These changes will align with POCA amendments introduced by Schedule 10 of the Serious Crime Act 2007 (SCA) which use “officer of Revenue and Customs” in relation to the detained cash investigation powers.
3.Paragraph 1 provides for POCA to be amended as set out in paragraphs 2 to 20.
4.Paragraph 2 amends section 289 of POCA. This section concerns searches.
5.Sub-paragraphs (2) and (3) replace references to ‘customs officer’ with references to ‘officer of Revenue and Customs’.
6.Sub-paragraph (4) inserts new subsections (5)(ba) which provides that HMRC officers may only exercise powers under section 289 in respect of matters which are not “excluded”.
7.Sub-paragraph (5) inserts new subsection (5A). This subsection defines “excluded matters” which are listed below. These are mainly ex-IR matters which are not within the scope of a Finance Act or matters in respect of which it is not considered necessary to extend the POCA powers. Consequently, an officer of Revenue and Customs is only allowed to search for cash using the POCA power when exercising a function which is not an excluded matter. The excluded functions are:
Disabled person’s tax credit;
Child benefit;
Child trust funds;
Guardian’s allowance;
The issue of bank notes;
The National Insurance Fund;
Oil and gas royalties;
Payment of or in lieu of rates;
Payment in lieu of tax reliefs, in so far as the Commissioners of Inland Revenue were responsible before the commencement of section 5;
Pension schemes;
Petroleum revenue tax;
Rating lists;
Recovery of taxes due in other member States, in relation to matters corresponding to those for which the Commissioners of Inland Revenue were responsible before the commencement of section 5 Stamp duty;
Stamp duty land tax;
Stamp duty reserve tax;
Statutory maternity pay;
Statutory paternity pay;
Statutory sick pay;
Student loans;
Valuation lists in relation to council tax; and,
Valuation of property.
8.Paragraphs 3, 4 and 5 make consequential amendments to sections 290, 291 and 292 to replace references to “customs officers” with references to “officers of Revenue and Customs”.
9.Paragraph 6 amends section 294 of POCA which deals with seizure of cash.
10.Sub-paragraph (2) makes consequential amendments to subsections (1) and (2) of section 294 to replace references with “customs officers” with references to “officers of Revenue and Customs”.
11.Sub-paragraph (3) inserts new subsections (2A) to (2C) to section 294. These new subsections limit the amendments so that they only apply to ex IR functions that are not ‘excluded matters’ as listed above. This amendment ensures that the section remains within the scope of a Finance Act. Consequently, an officer of Revenue and Customs is only able to seize cash under POCA when exercising a function which is not an excluded matter. New subsection (2B) confirms that an officer of Revenue and Customs who is exercising a function that is not an excluded matter is able to seize cash that the officer suspects is connected to an excluded matter.
12.Paragraphs 7, 8, 9 10 and 11 make consequential amendments to sections 295, 296, 297, 302 and 351 to replace references to “customs officers” with references to “officers of Revenue and Customs”.
13.Paragraphs 12 and 13 make consequential amendments to sections 352 and section 353 so as to replace references to “customs officer” with “officer of Revenue and Customs” in relation to confiscation investigations or money laundering investigations. Officers of Revenue and Customs can already conduct detained cash investigations so the sections are simplified by amalgamating the definitions for detained cash investigations, confiscation investigations and money laundering investigations into one subsection.
14.Paragraphs 14 and 15 make consequential amendments to sections 369 and 375 so as to replace references to “Customs officers” with references to “officers of Revenue and Customs”.
15.Paragraph 16 inserts new section 375A. This section limits the amendments to Chapter 2 of Part 8, so that they only apply to ex IR functions that are not ‘excluded matters (as listed in the note to paragraph 2 above). This ensures that the section remains within the scope of the Finance Act). Consequently, an officer of Revenue and Customs is only able to exercise the related powers when exercising a function which is not an excluded matter.
16.Paragraphs 17 and 18 made consequential amendments to sections 377 and 378, replacing references to “customs officers” with references to “officers of Revenue and Customs”.
17.Paragraph 19 inserts new section 408A. This section limits the amendments to Chapter 3 of Part 8, so that they only apply to ex IR functions that are not ‘excluded matters (as listed in the note to paragraph 2 above). This ensures that the section remains within the scope of the Finance Act). Consequently, an officer of Revenue and Customs is only able to exercise the related powers when exercising a function which is not an excluded matter.
18.Paragraph 20 makes the consequential amendment to section 412 to replace the reference to “a customs and excise officer” with the reference to “an officer of Revenue and Customs”.
19.Paragraph 21 repeals paragraphs 13 and 13A of Schedule 2 to the Commissioners for Revenue and Customs Act 2005 (CRCA). These two paragraphs reinforced the generic restriction within CRCA on the use of the POCA cash seizure and detained cash investigation powers for former IR matters and are no longer needed now that the POCA powers are being extended.
20.Paragraph 22 is an avoidance of doubt provision that confirms that the generic restriction within CRCA does not apply to the POCA asset recovery powers (as amended by this schedule).
21.Paragraph 23. Section 80 of the SCA amended the definition of ‘appropriate person’ in both section 325(5) and section 353(10) POCA to include ‘financial investigator’. Following the deletion of paragraph (a) of section 325(5) and 353(10) (see paragraphs 12 and 13 above) this amendment is no longer needed.
22.Paragraph 24 omits Paragraph 11 of Schedule 7 to the Policing and Crime Act 2009 (PCA) which amended paragraph 13A to Schedule 2 to CRCA. As paragraph 13A is repealed (see paragraph 19 above) this amendment is no longer needed.
Background
23.When the IR and HM Customs and Excise (C&E) merged in 2005 legislation in the CRCA prevented the automatic transfer of powers from one regime to another.
24.Following the HMRC Powers Review, most of the powers were harmonised when Police and Criminal Evidence Act (PACE) replaced former IR and C&E powers in England, Wales and Northern Ireland (FA 2007), and by amendments to the Criminal Law (Consolidation) (Scotland) Act 1995 for Scotland. The POCA powers were not included in the Powers Review process and this section and Schedule correct this.
