A dawn raid is a search of premises carried out by HMRC when it suspects that a tax fraud has been committed. Raids are generally carried out early in the morning.
Dawn raids can be carried out by other regulatory bodies such as the Serious Fraud Office (SFO) but this guide only applies to HMRC raids.
These are the first steps you should take:
- Check the identity of the HMRC team leader and ask them to speak with your solicitor on the telephone before the search starts.
- You should be presented with a copy of the search warrant (if not ask to see it). Send a pdf copy to your solicitor.
- Ask that all members of the HMRC search team remain in the reception area of your premises and ensure that members of your staff remain with them. However, it is vital that the officers are not physically obstructed.
Does HMRC have to wait for your solicitors to arrive before commencing the search? No, but you should ask courteously that HMRC staff delay further action until your solicitor arrives. This is a reasonable request, particularly if you are able to provide a definite timescale for your adviser's arrival, but do not be surprised if HMRC staff refuse. A search warrant will usually limit the time during which HMRC staff are entitled to remain on the premises so they may be reluctant to delay their search any longer than is necessary for you to telephone your solicitor
If HMRC staff refuse to wait, what should I do before they commence the search? Allocate a member of your staff to 'shadow' each officer of the search team. The role of the shadow is to keep a record of all documents examined, copied or removed by the HMRC officers.
Can members of staff be interviewed, searched or arrested?
The investigating officers are not permitted to interview or interrogate you or any member of staff at the premises. Any questions should be restricted to immediate issues relating to the search or the whereabouts of documents.
HMRC’s officers may search persons on the premises if they have reasonable cause to believe that a person has material likely to be of substantial value to the investigation of the alleged offence on his or her person. Personal searches may only be carried out by a person of the same gender.
An authorised officer of HMRC has the power to arrest without a warrant if he has reasonable grounds for suspecting that an offence has been committed and if he has reasonable grounds to suspect the person of being guilty of it.
The officers should not be physically obstructed and it is vital that no attempt is made to conceal documentation or information held. These could be arrestable offences.
What about documents protected by legal privilege?
Legal professional privilege (LPP) must be asserted where relevant, as documents subject to LPP are outside the scope of a search warrant. If no agreement can be reached, the documents should be placed in sealed envelopes pending resolution of the issue.
What about information stored electronically?
HMRC is entitled to obtain information stored in any electronic form. HMRC has equipment to enable them to copy data without removing computers from your premises– but they can take them if they wish. If they do, it will be months before you see them again. So make sure that you always have offsite backups of all your data.