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How to handle dawn raids

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By Evan Wright, Fraud and Business Crime Partner at JMW Solicitors

 

New legislation and greater levels of cooperation between government and law enforcement agencies have meant that HMRC dawn raids have become increasingly cost-effective in terms of recovering revenue. Between 2012 and 2017, the number of raids carried out has increased by a third, and this rate looks set to continue.

 

If HMRC suspects someone is committing tax offences and particular statutory criteria are met, they are able to raid the home and/or business of the individual in order to gather evidence to support their investigation. Raids are usually early in the morning and can target multiple branch offices at the same time to avoid any ‘tip-offs’ between locations.

 

Evan Wright, Fraud and Business Crime Partner at JMW Solicitors

A dawn raid can be extremely disruptive to a business, with HMRC officers authorised to remove computers, phones and documents, etc. from the commercial property or residence. This activity can prevent employees from carrying out their work and the business from operating as usual.

 

A raid does not necessarily mean that persons at the premises will become suspects in the wider investigation. A warrant is a method by which material is gathered so as to preserve its evidential integrity, and this can involve innocent parties. However, the majority of warrants are executed because of persons associated in some way with the address are suspected as having committed particular criminal offences. Arrests are often made and it is important to obtain early expert advice if legal rights are to be properly protected.

 

To help reduce the disruption of a dawn raid, every company should have a strategy in place to deal effectively with HMRC intervention, regardless of whether or not they have reason to be concerned about their own commercial activity.

Assign someone to take the lead

The first element of your strategy should be to have a nominated member of staff who can take the lead should a dawn raid occur. This employee should be fully briefed on the protocol to follow so they can take charge on the day. Their duties can include:

 

  • Note the time the officers arrive at the premises
  • Check the ID of all the officers in attendance
  • Ask that the officers remain in the reception area until legal representation arrives
  • Check the search warrant they present and take a copy
  • Take the officers’ contact details so that they can be contacted later regarding the investigation and the seized goods

 

Management should also ensure that all electronic data is backed up on a regular basis in order to minimise any difficulties following a raid.

Alert your solicitor

In the event of a raid, your initial step should be to obtain legal advice from a solicitor experienced in matters of this type. Throughout proceedings, it is important to remain calm and unobstructive. Officers are unlikely to object when properly challenged by a business trying to protect its legal rights and legitimate commercial interests.

 

Although officers do not have to wait until your solicitor arrives before commencing the search, most will usually agree to speak with them by telephone. Should officers begin their search before your solicitor arrives or speaks with them by telephone, it is recommended that a member of staff shadow each officer and make records of all documents examined, copied or removed. Employees should also request to make copies of any documents that are to be taken. While it may be possible to make a digital copy of data removed during the raid – if, for instance, a hard drive or laptop is taken – employees should take photos of the serial numbers on all hardware removed from the premises.

 

Officers will often attend the premises in company with a computer expert so that, where possible, servers and PCs can be copied on site without being removed. If the officers insist upon removing a particular server or PC, you should ask why it cannot be copied on site and you should write down their answer. It can take a long time to secure the return of devices removed from the premises.

Your employees’ rights

HMRC officers cannot interview or interrogate employees during a raid. They are able to ask practical questions (for example, the whereabouts of documents, hardware or passwords for computers). Such information should be provided wherever possible, as obstructing an officer in the course of executing a warrant can be a criminal offence.

 

If a key or other requested assistance is not provided for entry to locked rooms and safes, officers are permitted to use reasonable force. Personal searches of employees can be permitted, but must be completed by an officer of the same gender and searches must be in pursuance of the terms of the warrant of the Police and Criminal Evidence Act codes of practice.

Collect receipts of all removed goods

Finally, officers will ask someone present at the premises to sign receipts for the removal of goods and documents. They are usually referred to as ‘Property Registers’. It is important to check the contents and description carefully to ensure it is clear and accurate. Important items are sometimes described very generally and it can be difficult to identify the item from the register after the event. The officers will supply a carbon copy of the receipts before they leave. They must be retained because they will be the only immediate link to the seized items and if some items are business critical, your solicitor will need to accurately identify them in the course of securing their return.

 

Once the raid has finished, the nominated staff member should compile all receipts, copies and other data collected by the shadowing employees, and make this available to the senior management team and/or the solicitor when they arrive.

Goods and documents that cannot be seized

Documents protected by Legal Professional Privilege (LPP) are not within the scope of the warrant. LPP entitles a client to refuse to disclose confidential communications to another party (for example, HMRC or the court). It exists to allow clients to understand that what they tell their solicitor will be kept in confidence and not revealed without their consent or by order of the court.

 

Typically, LPP exists in two situations:

  • Legal advice privilege – communications between lawyer and client
  • Litigation privilege – communications between lawyer and client created for the dominant purpose of obtaining legal advice or preparing for imminent legal proceedings

 

Not all communications with a lawyer are protected by LPP, but a diligent HMRC officer will recognise when a document is likely to be protected; however, if an agreement cannot be reached, these documents should be placed in a sealed envelope until the issue is resolved. In some instances, LPP documents do not come to light until officers consider the evidence in more detail after it has been removed from the premises. In this event, they are obliged to follow a particular protocol and specific legal advice is recommended so that rights can be protected.

 

By following these steps, and remaining calm, your business and employees will be able to undergo a dawn raid with minimal stress and agitation, and so get back to work as quickly as possible.

 

Not all criminal defence or regulatory lawyers will have expertise in challenging the legality of search warrants or initiating legal proceedings in dealing with the consequences of an HMRC raid. You should research and identify the expertise in advance. The costs of legal advice can be substantial, but might be covered by an existing company insurance policy. If you are unsure, your broker or lawyer should be able to clarify. Quite a few clients who instruct us after the event subsequently discover that their insurance policy does not obtain the necessary cover. It is not expensive and should be explored as part of the company’s efforts in protecting its own business and reputation.

 

 

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Business

How ecommerce businesses can retain customer loyalty during a recession

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By Olusegun Akande, founder of Samis & S&T Enterprises

As the UK’s recession worsens and consumers continue to feel the pinch caused by the cost-of-living crisis, many stores (online and in-person) are under pressure to retain existing customers and win over new customers to keep their businesses going in 2023.

Whilst smaller shops and ecommerce businesses might not have the reputation and accessibility of some of the larger supermarkets, there are benefits to being small and nimble, which means a leg up over the bigger players too. Here’s how small commerce businesses can continue to build relationships with customers and increase their loyalty, even in a recession.

Keep things personal

Whether it’s in-store, online or through social media, customers still respond well to a personalised service. Whether that’s the cashier notifying them that their favourite product is back in stock, or a response to a comment they left on your social media pages, small personal gestures can increase your relationship with your customers and in turn, can keep them loyal to your services.

Ask your customers what they want

This builds on my point about personalisation, but if you have a group of customers that regularly buy products from you, or come to your store, ask them what it is they enjoy about the experience, why they come to you and what they would like to see more of.

This doesn’t just tell your customers that they’re a valued customer and that you value their opinion, it also offers you free insight into how to build your business in a way that customers will respond well to, and increase your profitability. It can also work the opposite way – asking your customers what they don’t like. Showing you which products, services or aspects of your business that might not be generating value, or stopping the sales pipeline. Customer pet peeves might include long queues (if in person), not having a search function on your website or a complicated checkout process.

Introduce a customer rewards scheme

Introducing a rewards scheme is a great way to keep customers coming back to your store. Sometimes, the software programmes that your loyalty rewards scheme is built through enable you to track what products your customers buy the most, the money they’ve spent and how frequently they shop, so this can also be a way to see what products are most popular.

Show customer’s the value in shopping with you

The tactics mentioned above are great ways to drive customer loyalty, but ultimately it comes down to whether you can save customers’ money. It’s important that you do offer products at a cheaper rate than competitors; highlight it on your website or showcase it on social media. Customers will pay attention and it will help to drive new customers to your store.

You could even go a step further and get customers who have saved money to appear as case studies on your social media or website. Nothing is more persuasive than a real world example!

As you can see, there are a multitude of ways you can engage customers to keep them loyal during a recession, it’s just a case of getting creative.

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Business

2023 crypto trends that businesses need to know about

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By Marcus de Maria, Founder and Chairman of Investment Mastery

 

As cryptocurrencies have started to enjoy wider global acceptance in recent years, businesses and financial institutions have been slower to join the trend. Perhaps wisely, the business community has been more cautious in its approach to adopting cryptocurrencies than previously anticipated when Bitcoin first launched in 2009.

The tide is shifting though. The ever-changing digital marketplace has meant we’re now seeing increasingly more household name brands such as Microsoft, Google and Starbucks embracing payment in Bitcoin for some or all of its services or certainly trialling it. As 2022 draws to a close, over 15000 companies are excepting Bitcoin as payment around the world.

As more businesses take the plunge into the crypto world and off the back of one of the most volatile years in crypto history, what changes can we expect to see over the next year?

John Castro, CEO of Investment Mastery shares his 2023 cryptocurrency predictions below.

Marcus de Maria

Like the stock markets the crypto market is struggling against a backdrop of high inflation, the soaring cost of living, and a recessionary environment. As such prices have dropped a lot. However, sit up and take note for businesses who are looking into cryptocurrencies, 2023 could be looking promising for these three key reasons:

  1. The entering of institutions: What we are seeing now and what we will be seeing more of in 2023 are institutions entering the market. Pension funds are adding cryptos to their assets for the first time, news broke earlier this year that BlackRock is partnering with Coinbase to deliver crypto to their customers, and Fidelity and Citigroup are joining with their millions of clients. As the market inevitably becomes more regulated, we can expect this trend to continue which will encourage market growth.
  2. The formation of partnerships: As well as reputable institutions entering the market, 2023 will be bolstered by new partnerships between crypto and big business. We’re seeing Amazon partnering with either Ethereum and Solana among other cryptocurrencies and blockchains to host their cloud service. This has made the idea of crypto payment more attractive to global business leaders. As more businesses adopt cryptocurrency, we are likely to see a more stable crypto market in 2023.
  1. Bad players leaving the game: Like any market, crypto has had its share of bad players. In 2022 the market lost a lot of value thanks to the likes of Celsius ftx. This has inevitably shaken investors’ faith having a knock-on effect on price. But as these bad payers are knocked out, we predict that much needed trust will be rebuilt throughout the next year which will help lead to an increase in value.

With reputable institutions entering the market, powerful partnerships being made and the removal of those giving crypto a bad name, the prediction for 2023 is that demand for cryptocurrencies and blockchain technology is only going to increase. With supply staying the same thanks to the very nature of crypto, we can expect the price to inevitably increase.

So could a Bull market be upon us in 2023? Time will tell but one thing is for sure, cryptocurrencies are here to stay. It’s time for businesses to put their game faces on…

 

About Investment Mastery

Founded in 2003, Investment Mastery is a premium training and education company delivering easy to follow and profitable trading and investing strategies.

Today, Investment Mastery delivers training seminars and workshops, online and live in-person, annually. They have educated over thousands of people across 25 countries, while also developing and delivering industry-leading online support and training that is delivered in three different languages.

Led by founder and chairman Marcus de Maria and his expert team of real traders and investors in the fields of stocks, cryptocurrencies and forex, Investment Mastery’s training education is influenced by the exact same proven techniques that Marcus uses to trade and invest his own money.

The team at Investment Mastery do not just help clients to strengthen their finances, but their mindset too. This helps clients uncover, address and breakthrough their limiting beliefs behind wealth creation and find their reasons ‘why’. This unique approach is what sets them apart from other wealth creation educators and is why clients achieve such incredible results.

 

 

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