Search warrants wrongly issued

In 2003-04 Mercury Tax Group ran a legitimate tax avoidance scheme.

HMRC suspected that the scheme was being operated dishonestly in that copies of clients’ signatures were taken from draft documents and attached to final versions which contained a change from the drafts.

In 2007 HMRC applied ex parte for search warrants under TMA 1970 s 20C to enter Mercury Tax Group’s offices.

The claimants challenged the validity of HMRC’s application to obtain warrants and also the decision of the crown court to grant them. They said that the evidence provided to the court did not justify a reasonable suspicion that a serious tax fraud had taken place.

The High Court describing the appeal as a borderline case said HMRC had not presented their case for a search warrant with scrupulous accuracy and in a way that the judge could have made a fair assessment...