Proceeds of Crime Act 2002, section 317

The National Crime Agency's general Revenue functions

Part 6 Revenue Functions

(1)For the purposes of this section the qualifying condition is that [F1091the National Crime AgencyF1091] has reasonable grounds to suspect that—

(a)income arising or a gain accruing to a person in respect of a chargeable period is chargeable to income tax or is a chargeable gain (as the case may be) and arises or accrues as a result of the person’s or another’s criminal conduct (whether wholly or partly and whether directly or indirectly), or

(b)a company is chargeable to corporation tax on its profits arising in respect of a chargeable period and the profits arise as a result of the company’s or another person’s criminal conduct (whether wholly or partly and whether directly or indirectly).

(2)If the qualifying condition is satisfied [F1091the National Crime AgencyF1091] may serve on the Commissioners of Inland Revenue (the Board) a notice which—

(a)specifies the person or the company (as the case may be) and the period, and

(b)states that [F1091the National Crime AgencyF1091] intends to carry out, in relation to the person or the company (as the case may be) and in respect of the period, such of the general Revenue functions as are specified in the notice.

(3)Service of a notice under subsection (2) vests in [F1091the National Crime AgencyF1091] , in relation to the person or the company (as the case may be) and in respect of the period, such of the general Revenue functions as are specified in the notice; but this is subject to section 318.

(4)[F1091 the National Crime AgencyF1091] —

(a)may at any time serve on the Board a notice of withdrawal of the notice under subsection (2);

(b)must serve such a notice of withdrawal on the Board if the qualifying condition ceases to be satisfied.

(5)A notice under subsection (2) and a notice of withdrawal under subsection (4) may be in respect of one or more periods.

(6)Service of a notice under subsection (4) divests [F1091the National Crime AgencyF1091] of the functions concerned in relation to the person or the company (as the case may be) and in respect of the period or periods specified in the notice.

(7)The vesting of a function in [F1091the National Crime AgencyF1091] under this section does not divest the Board or an officer of the Board of the function.

(8)If—

(a)apart from this section the Board’s authorisation would be required for the exercise of a function, and

(b)the function is vested in [F1091the National Crime AgencyF1091] under this section,

the authorisation is not required in relation to the function as so vested.

(9)It is immaterial whether a chargeable period or any part of it falls before or after the passing of this Act.

Cases considering section 317 5

NATIONAL CRIME AGENCY v TONINO CARMINO PERSICO

[2021] EWHC 3476 (QB) · 21 December 2021

Applies the provision authorising the National Crime Agency to take over specified Revenue functions where it has reasonable grounds to suspect that taxable income, gains or profits arise from criminal conduct. The exercise of the power was not challenged.

Serious Organised Crime Agency v Fenech

[2011] EWHC 10 (QB) · 13 January 2011Interprets

Interprets section 317 as requiring a genuine suspicion that income arose from criminal conduct and an objectively reasonable basis for that suspicion. The condition may be based on criminal conduct of any relevant kind, and the income need not be traced into the restrained cash. (see paras [23]-[29]; [44]-[48]) Applies the qualifying condition in section 317(1) by asking whether the Agency and its officer genuinely suspected criminally derived income and whether that suspicion was objectively reasonable. Both stages were satisfied. (see paras [23]-[29]; [47.1]-[47.2]) Confirms that, once the qualifying condition is satisfied, the Agency may assume specified general revenue functions from HMRC. The Agency therefore had jurisdiction to act in relation to the respondent. (see paras [26]-[29]; [47]) Confirms that the Agency must withdraw its notice if the qualifying condition ceases to be satisfied. The judgment treated continuing reasonable grounds for suspicion as necessary to maintain jurisdiction. (see paras [26]-[29])

Sharma v Top Brands Ltd & Ors

[2015] EWCA Civ 1140 · 10 November 2015

The court noted recovery of sums due by way of tax under section 317 as another qualification to forfeiture. This provided no basis for extending the common-law illegality defence. (see para [48])

What each judgment says about section 317 is in the case-law panel in the full Act.

Explanatory note

445.Subsection (1) sets out the qualifying condition which must be satisfied before the Director of the Assets Recovery Agency can take over general Revenue functions (defined at section 323(1)). The condition is that the Director must have reasonable grounds to suspect that income, profits or gains arising or accruing to a person (including a company) in respect of a chargeable period are chargeable to tax and arise or accrue as a result of that person’s, or another’s, criminal conduct. Criminal conduct is defined in section 326.

446.If this condition is satisfied, then subsection (2) allows the Director to serve a notice on the Board of the Inland Revenue that has the effect of vesting certain functions of the Inland Revenue in the Director.

447.The notice served on the Board of the Inland Revenue will specify a number of things. These will include adequate details to identify the relevant person or company, the chargeable periods in question and also the particular functions that the Director wishes to assume responsibility for. These may be some or all of the functions listed in section 323(1). The notice will also specify the particular tax periods during which the income, profits or gains are suspected of arising as a result of criminal conduct.

448.Subsection (3) gives effect to the vesting of the Revenue functions in the Director, while subsection (4) allows the Director to serve on the Board a notice of withdrawal of the notice under subsection (2). Subsection (4)(b) provides that such a notice must be served if the qualifying condition ceases to be satisfied.

449.Subsection (6) states that when a notice of withdrawal is served under subsection (4) above, the Director is divested of the functions specified in that notice and for the periods specified in that notice. Subsection (7) provides for the tax function to be vested in both the Director and the Inland Revenue officers concurrently. This will allow, among other things, routine work to be carried out by the Inland Revenue notwithstanding that the functions are also vested in the Director

450.Subsection (8) provides that in circumstances where authorisation of the Board would normally be required for the exercise of a function it is not necessary if the function is vested in the Director.

All the explanatory notes for the Act

Amendments and notes

3 notes from legislation.gov.uk

Amendments

  1. F1090Words in s. 317 title substituted (7.10.2013) by Crime and Courts Act 2013 (c. 22), s. 61(2), Sch. 8 para. 122(2); S.I. 2013/1682, art. 3(v)
  2. F1091Words in s. 317 substituted (7.10.2013) by Crime and Courts Act 2013 (c. 22), s. 61(2), Sch. 8 para. 122(3); S.I. 2013/1682, art. 3(v)

Commencement

  1. I272S. 317 in force at 24.2.2003 by S.I. 2003/120, art. 2, Sch. (with arts. 3, 4) (as amended (20.2.2003) by S.I. 2003/333, art. 14)