Gill & Anor, R. v

Revenue officers investigating suspected serious tax fraud are persons charged with investigating offences for the purposes of Police and Criminal Evidence Act 1984 Code C. A taxpayer questioned in a Hansard interview should therefore be cautioned and the interview recorded.

A breach of Code C does not automatically require exclusion under section 78. The court must assess the seriousness and purpose of the breach, any bad faith, and its actual effect on fairness. Where statements are relied on as deliberate lies rather than admissions, and the taxpayer understood the risk of prosecution, their admission may be fair notwithstanding the breach.

The appellants, brothers who ran a clothing-manufacturing and property business, were convicted at the Crown Court at Snaresbrook of cheating the Revenue by failing to disclose United Kingdom and offshore accounts in tax returns and asset statements. They maintained that offshore funds derived from an Indian farm and that they retained an Indian domicile.

They appealed against conviction. The principal ground concerned answers given at an uncautioned and unrecorded Hansard interview in 1995, which the prosecution relied on as lies demonstrating dishonest intent. Further grounds alleged misdirection on domicile and cheating the Revenue, and inadequate directions on the individual counts.

1. Appeal dismissed. The court held that Code C applied to the Hansard interview. The Special Compliance Office officers were investigating suspected serious tax fraud and therefore offences. Although their principal aim was a civil settlement, criminal proceedings remained a possible outcome. The appellants should have been cautioned and the interview should have been tape-recorded.

2. The breach did not make the evidence automatically inadmissible under section 78 of the Police and Criminal Evidence Act 1984. The required question was whether admission would adversely affect the fairness of the proceedings to the extent that the evidence ought to be excluded. The breach was significant, but it was neither in bad faith nor a flagrant disregard of Code C. The Revenue and the trial judge had reasonably, though incorrectly, regarded the interview as civil.

3. The statements were relied on as alleged lies, not as true admissions. The caution safeguards against unwitting admissions and informs an interviewee of possible criminal use of answers; it is not principally directed to preventing lies. The appellants knew that prosecution remained possible, had been advised to obtain professional representation, and were able to defer a written response. Their later cautioned interviews could fairly address their earlier answers. The court’s conclusion was consistent with R v Allen [2001] UKHL 45.

4. The domicile direction was adequate. The issue could matter only if funds had been earned offshore and remained offshore. On the evidence, the jury could find that funds were United Kingdom business profits, or had come onshore before being transferred offshore. In any event, the judge correctly directed that non-domiciled treatment depended on a clear and settled intention permanently to return to India.

5. The direction on cheating the Revenue was correct. The offence can consist of deliberate fraudulent conduct which prejudices, or risks prejudicing, the Revenue’s right to tax. It need not involve a false representation or proof that tax was actually evaded. The judge also gave adequate count-specific directions. The convictions were safe, and the renewed applications for leave on the remaining grounds were refused.

• Court of Appeal (Criminal Division): dismissed the appeals against conviction in [2003] EWCA Crim 2256 and refused renewed leave on the remaining proposed grounds.
• Crown Court at Snaresbrook: on 15 March 2002, the appellants were convicted of counts of cheating the Revenue. Sentences of three years’ and twenty months’ imprisonment respectively were imposed on 15 May 2002.