Civil Recovery And Tax Evasion

• Published date: 16 June 2020
• Author: Mr Harry Travers and John Binns
• Subject Matter: Government, Public Sector, Criminal Law, Money Laundering, White Collar Crime, Anti-Corruption & Fraud
• Law Firm: BCL Solicitors LLP

It is well known by now that of the new powers added to the UK's Proceeds of Crime Act 2002 (POCA) by the Criminal Finances Act 2017 (CFA), the most practically effective have not been the much-trumpeted Unexplained Wealth Orders (UWOs) but Account Freezing and Forfeiture Orders (AFFOs), a civil procedure for freezing and recovering funds in bank and building society accounts, with no need for criminal proceedings. Although the biggest headlines are generally reserved for the use of such powers by the National Crime Agency (NCA), we now know, thanks to figures released in response to a recent freedom of information request, that they are also increasingly well used by HM Revenue and Customs (HMRC) in their efforts to combat tax evasion.

POCA and tax evasion: an uneasy relationship

The relationship between POCA and tax evasion has never been an entirely easy one. In HMRC's favour, POCA's 'all crimes' approach means that tax evasion is a predicate offence for the purposes of both its civil recovery and money laundering provisions. That means that, even before the CFA, the proceeds of tax evasion have been civilly recoverable in the High Court, and acts of dealing with or...