The number of arrests made by HMRC fell by 35% to 511 in the year ended 31 March 2020, compared to 782 in 2018/19, according to law firm RPC.
This marks the lowest number of arrests that the body has made in each of the last five years, and comes as HMRC is now “taking greater caution” when deciding whether or not to arrest a suspect on suspicion of tax evasion.
It had previously received criticism for making “too many unnecessary arrests”, and as a result, has been subject to wrongful arrest claims in recent years.
RPC cited one example where HMRC was ordered to pay £32,000 in costs and compensation when the High Court ruled that an arrest it made was unlawful, and the subsequent detention of the suspect constituted false imprisonment.
The law firm added that the “substantial” resources spent in fighting similar claims, as well as the resulting negative publicity, has “probably led to HMRC adopting a less trigger happy approach when it comes to arresting people”.
In addition, it noted that lockdown has “hampered” HMRC’s ability to conduct criminal investigations, which will “likely” lead to a further decrease in the number of arrests carried out this year.
Adam Craggs, partner at RPC argued that HMRC should not make arrests unless it is “appropriate” to do so, for example, in cases where there is a “genuine concern” that a suspect may destroy evidence or refuse to attend for an interview under caution.
He said: “Being arrested can have serious implications for the person arrested, even if they are ultimately not charged with a criminal offence. For example, it may lead to difficulties in obtaining a visa to visit certain countries. HMRC therefore needs to think carefully before it exercises its power of arrest.”
“It would appear that criticism of HMRC that it was arresting suspects when it should not have been has had a positive effect on the Revenue. The numbers suggest that HMRC is now exercising more caution when deciding whether or not to arrest a suspect.”
Michelle Sloane, partner at RPC, added: “HMRC needs to make sure that it exercises its power of arrest responsibly and in accordance with the law. HMRC should only be arresting suspects when it is lawful to do so.”