I thank the Financial Secretary for his kind words and join him in enthusiastically congratulating both Mr. and Mrs. Gauke on their elevation, which is doubly deserved.
“UK wide criminal investigations can raise complex issues around jurisdiction and the correct procedures and powers to use when gathering evidence and apprehending suspects. This clause clarifies how evidence can be gathered and suspects can be apprehended using powers that are familiar and acceptable to the court where any proceedings are likely to follow.”
In light of that, there is a question that I would like to raise with the Minister. In the case of an HMRC investigation that spans more than one of the home nations, would there be a code of practice as to which jurisdiction the investigation and potential legal proceedings would take place under? The Financial Secretary in response to the previous debate intimated that a guidance note is now being drafted by the relevant prosecuting authorities and I am sure that the Treasury will be liaising with them on that. I should like to press him on this a little further while I have the opportunity.
There are many English residents who have their tax affairs dealt with by HMRC offices in Scotland, such as the one in Cumbernauld. Conversely, many Scottish and Northern Irish residents have their tax affairs dealt with in England or Wales. Given that, what would happen in the case of an English taxpayer who is in dispute with HMRC and whose only connection with Scotland is via his tax office in Glasgow? If the dispute then turns into a criminal investigation, could the English taxpayer be arrested and prosecuted under Scottish law? Would he have to travel to Scotland, hire Scottish lawyers or advocates and be put on trial in Scotland even though he ordinarily resides in England?
How does the Financial Secretary see all this working in practice? As he has already referred to a guidance note, which I think would be welcome under the circumstances, could he update the Committee on the progress of those negotiations and give us at least an indicative date, if not a hard one, for when that guidance note is likely to be published? I imagine that not least among the professions, including the legal profession, there would be a great deal of interest in what that guidance note has to say. I hope that the Financial Secretary can understand the spirit of what I am asking him and perhaps give us a little further detail of how this would operate in the real world.
To endorse some comments made by my hon. Friend, who is shortly to become my European Friend, does this power give HMRC the option to choose in which jurisdiction it wishes to pursue a case against the taxpayer? If so, that would seem to put HMRC in a stronger position in seeking redress against the taxpayer. It would seem appropriate that there should be some safeguards to ensure at least that such a decision is taken with the agreement of the taxpayer rather than against the taxpayer’s wishes.
It is important in this discussion to remember that prosecutions and the arrangements for prosecutions are now the responsibility not of HMRC but of independent prosecutors. That is the importance and the relevance of the guidance that I mentioned that will be drawn up by the Revenue and Customs Prosecution Office and the Crown Office in Scotland. They will work together on that guidance note.
Perhaps I can give an indication of how these matters are dealt with currently in practice, which I think members of the Committee might expect to see broadly reflected in the approach that will be taken in future. The Paymaster General set this out in a letter in August last year to the Chartered Institute of Taxation and it was reproduced in the consultation document. The practice is relevant in the sort of circumstances that concern the hon. Members for Rayleigh and for Ludlow.
In practice, the decision on where proceedings are to take place will usually be taken on the balance of convenience——that is, where the taxpayer and the majority of the witnesses reside. That is how these matters are generally conducted now. As I began by saying, these matters are now for the independent prosecutors to decide, not HMRC and certainly not Government Ministers or Treasury officials. I hope that that gives sufficient indication and some reassurance so that the Committee feel comfortable about allowing the clause to stand part of the Bill.