Clause 221 - Powers under Proceeds of Crime Act 2002

Part of Finance Bill – in a Public Bill Committee am 3:15 pm ar 20 Mehefin 2013.

Danfonwch hysbysiad imi am ddadleuon fel hyn

Photo of Sajid Javid Sajid Javid The Economic Secretary to the Treasury 3:15, 20 Mehefin 2013

I welcome you to the Chair, Mr Amess, and to our last Committee meeting, and I thank the hon. Gentleman for what I take to be his broad support for all four of these clauses.

Clause 221 makes changes to allow HMRC officers to exercise Proceeds of Crime Act asset recovery powers when making criminal investigations into suspected former Inland Revenue offences. HMRC already has  criminal asset recovery powers under POCA, but those are only available for criminal investigations into former customs and excise offences, such as those relating to VAT and excise duty. When HMRC is investigating a former Inland Revenue offence the police must currently be called in to exercise those POCA powers. The clause aims to correct that anomaly by bringing those powers in house. The changes that the clause will make are that an HMRC officer when undertaking criminal investigations into Inland Revenue offences will be able to seize cash where there is a suspicion that the cash derives from a direct tax evasion or tax credit fraud and exercise POCA criminal asset recovery orders and warrants. HMRC officers will no longer have to liaise with police officers or potentially miss out on a criminal asset recovery if the police are for some reason not available.

Clause 222 makes changes to better define the term “goods” in customs law. It means that officers can search, examine and obtain information about goods, including commercial documents and empty parcels and packages, without the fear of a legal charge. The term “goods” is currently defined in the Customs and Excise Management Act 1979 as “including stores and baggage”. The changes made by clause 222 put it beyond doubt that the term “goods” includes containers and anything in them. That will give officers greater certainty in their powers to carry out examinations. It will contribute to our overall aims of reducing the tax gap and securing our borders.

Clause 223 makes changes to ensure that customs officers can detain things that they have reasonable grounds to suspect may be liable to forfeiture. The clause makes a number of changes to the Customs and Excise Management Act 1979. It will strengthen and make explicit our power to detain goods on reasonable grounds while we investigate their duty status. It will provide statutory safeguards including a maximum initial period of detention of 30 days and it will introduce a civil penalty for the removal of detained goods. This clause will clarify the law so that HMRC can continue to detain goods on reasonable grounds. It will also support the alcohol and tobacco strategies. The loss to the Revenue of non-payment of duty on beer and spirits was estimated to have an upper limit of £5 billion over a five-year period. The changes are expected to have a minimal cost for compliant businesses and will minimise disruption. The hon. Gentleman asked me for information on the tobacco gap. I do not have the number to hand but I will see if I can get it. I will most certainly write to him about it.

Finally, clause 224 increases the maximum fines on shipping lines and responsible officers of ships of more than 250 tonnes for smuggling by their crew. As we heard, the current maximum fine is £500; that was set in place in 1952 and has been eroded by inflation. Clause 224 increases the maximum level to £10,000, the current equivalent of £500 in 1952. I can reassure the hon. Gentleman that this measure provides for uprating by secondary legislation.