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How to handle dawn raids



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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Digital Acceleration – the next buzzword in banking tech? Or a new era for the industry?




Ove Kreison, CTO at Tuum

McKinsey’s latest report on banking found that traditional banks are spending a whopping 85% of their tech budgets on maintaining legacy solutions, with just 15% going towards building anything new for customers.

Digital transformation’ has been the buzzword in banking technology for years, but the figures suggest there’s still a lot of ‘transforming’ left to be desired. Now we’re beginning to see the term ‘digital acceleration’ come to the fore, what does that mean for the state of banking technology? What is the difference between acceleration and transformation, and what should banks and other financial services players do to remain competitive?

Digital transformation – the second machine age which has taken an age!

The idea of ‘digital transformation’ didn’t come out of the blue. Banking – like most other industries post-WW2 – has been experiencing the ‘second machine age’ for decades, exploring how technology can digitize processes and services to make cost, operational and organisational efficiencies. All the while, this process has also made it far easier for companies to be more competitive with new digital products that are slicker, quicker and more user-friendly.

Banks have benefited from wherever they have had digital transformation to date – but it is the digital transformation of core technology stacks that is having the most impact and making banks realise operational efficiencies while making them nimbler to adapt to changing customer needs and remain relevant and competitive in a highly disrupted market.  Digital transformation to the core gives banks the ability to launch new offerings to market quicker, renovate and modernize business models, leverage and analyse data from multiple systems taking innovation of the more exciting front-end and customer centric offerings to the next level.  Faster speed to market,  highly personalised offerings, more agile, more scalable.

Success and progress to date, however, has been slow. Traditional banks especially are lumbered with highly complex and costly core technology stacks. Digital transformation and upgrading these core stacks still remains a priority, but the next wave of digital acceleration is now an urgent priority on the c-suite agenda to ensure banks compete and survive in a rapidly evolving industry.

Digital Acceleration vs Digital Transformation

Digital transformation at its core takes the existing ways companies have run their business and applies new technologies to digitize them – for example, taking a paper-based application process and making it online.

Digital acceleration is different. Here, digital becomes the very core of the business model, creating further new digital processes. It gives the power to not just make existing processes digital but to reimagine how those processes impact and improve the business. Some of the most forward-thinking banks are already doing this. BBVA, the second biggest bank in Spain, is actively and openly seeking to become a software company in the future and has digital at the heart of its offering. It embraced open innovation and new technologies to better serve its customers – for example, it launched an app-based money transfer offering, Tuyyo, in 2017. It’s also exploring how technologies like blockchain can be used to transform fundamental banking services such as loan origination, with the aim of improving the way it runs its businesses.

Co-Value Creation – Going it Alone isn’t an Option

A core facet of digital acceleration – especially in a highly mature and saturated market like banking – will be how banks, fintechs, enterprises and others collaborate to mobilise these more diverse capabilities and expertise, bringing mutual benefits to all parties.

The pace of technological change is so hypercompetitive to the point now where organisations cannot always sustain their competitive advantage or ‘do it all’. Constantly updating your offering to maintain market share and react to new demands has become a necessity for banks, but it is exhausting. More and more banks and FS providers are realising that the strategic resources and capabilities needed to deliver these innovative services lie outside of their business, and given the fast pace of change, developing everything in-house is unrealistic given the skills gap, time and cost constraints. Moreover, tech advances around integration and APIs mean collaborating with third-party experts has never been easier or more effective to bring capabilities that, combined with their own core offerings and customer data, provide an important competitive advantage and valuable proposition for customers.

One brilliant example of this is ING. Recognising the struggles associated with traditionally manual and paper-intensive trade finance processes, it launched a blockchain-based commodities financing platfrom Komgo in 2018 with a consortium of other banks and corporates like Société Général, Citi, and Mercuria. In an age of hypercompetition – mutually beneficial collaboration is the answer.

Transform, accelerate, create

Ultimately, banks can continue to digitally transform while also looking to digitally accelerate. In fact, the two go hand in hand; in order to reap the benefits and be able to consider platform co-creation and digital acceleration, banks need to transform their tech stacks from the core to have the capability and agility to think beyond the realms of their own core business and their own technology. Those that get it right by driving innovation from the core, are reimagining their business models for the digital age, tapping into new revenue streams and becoming more customer-centric are not only more relevant now but future proofed for digital acceleration of the future.

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Regulations, RegTech and CBDCs – Fintech’s Next Chapter 




Teresa Cameron, Finance Director at Clear Junction 


Over the last decade, the UK has embraced the fintech revolution with open arms. The remarkable growth and innovation in recent years has transformed the way financial services are delivered and accessed. In the UK, fintech accounts for around half of venture capital in the UK, and as we race to meet consumer demand, we’re seeing the development of new services flood the market: from digital wallets to AI chatbots, biometrics and touch IDs.

London is recognised globally as a crucial hub for fintech innovation, yet with this great power comes great responsibility. Both the FTX and SVB collapses dented trust in fintech, and this has translated into a dip in venture capital investment in the industry, which declined globally by 30%.

2022 was called fintech’s year of reckoning, but 2023 stands as the year to rebuild and we need to recognise that regulation is not a scary word. Now is our chance to be part of the next evolution in fintech, that will solidify it as an accredited and stable industry. By leading the charge now, we can make sure we have a say on what the future of fintech will look like.

Sustainable practices = sustainable growth

The Financial Conduct Authority (FCA) is set to implement its Consumer Duty in the upcoming months. Whereas before, the FCA has broadly been reactive, this will be the first time that the FCA will be formally setting out regulation and will have a proactively structured programme.

One of the most important aspects is to make sure that financial services put the interests of their customers at the heart of their business operations. This means a higher standard of protection across the industry and providing consumers with transparent information, as well as making sure that staff are trained and held accountable.

This is a huge step to regain trust in the industry right now and help raise the bar in what we can offer consumers. Change begins from the inside and by closely working with regulators and adhering to their guidelines, fintechs in the UK can benefit from the increased trust and confidence in the digital currency ecosystem. This approach not only protects consumers and investors but also means that we can bolster the legitimacy and viability of digital currencies as an alternative to traditional financial systems.

Regtech Revolution

It’s estimated that globally $2trillion is laundered annually, and the threat of financial criminals continues to rise as they become more sophisticated and utilise new technology, either through payments, open banking, or crypto. This, twinned with new global regulations and increasing compliance costs, means the need for innovative solutions in the regtech industry has never been greater.

We’ve seen an explosion in AI and machine learning (ML) tech to help better protect customers, and they have completely transformed the regtech space. These technologies can be used to analyse vast amounts of data and identify patterns that may indicate fraudulent activities. The algorithms can detect anomalies, flag suspicious transactions, and continuously learn from new data to improve fraud detection capabilities over time. That’s not to say that its completely fool proof. Continuous monitoring, regular updates, and staying abreast of emerging fraud trends will also be crucial.

At the same time, as the regulatory landscape becomes more complex and we see new rules develop over time, this tech will help fintechs mitigate risk management practices and maintain compliance in an efficient and cost-effective manner.

CBDCs and decentralized finance 

Central bank digital currencies (CBDC) have been a hot topic of conversation, with pilot initiatives underway globally. Most recently the European Central Bank is currently said to start with proposed legislation in the next several weeks and here in the UK the Bank of England is also blueprinting plans for the ‘Britcoin.’

Digital currency backed by a central bank has been heralded to be a safe and stable means of payment and less volatile than crypto. However, some are concerned over privacy and anonymity surrounding a state-owned currency.

Tom Mutton, who is leading the Britcoin charge, has stated that the BoE never sought to make the digital pound anonymous, and that privacy will be a top priority. Under the Bank’s proposals, consumers would engage with the digital pound through private sector providers. With the increasing integration of digital currencies into mainstream operations, in the UK and abroad, both the government and financial institutions are showing growing interest in making sure there is a stable foundation of regulation as it develops.

Following regulations can pave the way for digital currency companies to tap into traditional banking services, which is crucial for their growth and overall success. Banks tend to be cautious about partnering with digital currency companies due to perceived risks associated with the industry. However, when these companies demonstrate compliance with regulations, it helps alleviate those concerns and makes banks more willing to collaborate.

We are at the beginning of a new age in the fintech space, and it’s an exciting place to be. We, as financial intuitions, have an opportunity to help write the next chapter. It is a long road to map out ahead, but we need to look for sustainable, long-term practices because, ultimately, that equals sustainable long-term growth, and fundamentally means survival for the industry.

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