The number of production orders issued by HM Revenue & Customs (HMRC) is continually on the rise, says the Revenue’s Fraud Investigation Service.
A recent study conducted by law firm RPC found that HMRC issued almost 1,500 demands for information on clients last year, and 8,000 production orders over the last five years.
The demands are increasingly plaguing professionals with awkward obligations to comply, despite breaching their data protection and client confidentiality policies in doing so.
This is because solicitors, accountants and auditors alike run the risk of criminal liability if they fail to meet HMRC’s demands – even in cases where they do choose to provide information, but the information in question is later deemed to be ‘inadequate’ by officials.
A HMRC spokesperson said: “Production orders are an important tool in HMRC’s fight against criminality and contributed to us protecting more than £2 billion from attacks on the tax system during 2014-15.
“The government’s on-going investment in the department allows us to continue to track down and bring to justice those who think they don’t have to play by the rules, so we can fund essential public services.”
But Adam Craggs, partner at law firm RPC, argued: “It can be very difficult to strike the right balance between providing HMRC with sufficient information and documentation to comply with the production order and not compromising client confidentiality by providing more information than is necessary”.