Proceeds of crime

The Serious and Organised Crime Agency (SOCA) predecessor of the National Crime Agency (NCA) executed a warrant at the taxpayer’s address in December 2007.

SOCA suspected the taxpayer – who had run a cafe that closed in July 2007 – had received income through a connection with a criminal group. The agency found £276 920 cash which was confiscated on the ground it was the proceeds of crime.

Investigators carried out a review of the income declared in the taxpayer’s returns and bank accounts and concluded he had an undeclared second source of income.

SOCA notified the taxpayer in July 2011 that it had adopted the general function of HMRC and issued discovery assessments for the years 2001/02 to 2008/09.

The taxpayer appealed.

The first issue before the First-tier Tribunal was whether Proceeds of Crime Act 2002 s 317(1)(a) was satisfied: did the authorities –...