LEXLAW Solicitors & Barristers
HMRC’s use of Account Freezing Orders has risen 170% over the past 3 years. An AFO allows HMRC to quickly freeze funds in accounts suspected of criminal activity for up to two years. The number of AFOs, easily obtained by HMRC, has surged from 125 in 2022 to 341 in 2024, with the value of frozen assets rising massively. AFOs pose catastrophic risks for innocent businesses caught up in HMRC’s net.
HMRC consented to the dismissal of a £0.5m winding-up petition against our client company, conceding their petition and agreeing to pay substantial costs. Our solicitor and counsel team successfully argued HMRC’s actions, including account freezing and misrepresentation, were an abuse of the proper process of the Companies Court. This case highlights the repercussions for all, including UK Government agencies, that engage in unjustified petitions.
An Account Freezing Order (AFO) is a UK court order that restricts access to funds in bank accounts suspected of involvement in criminal activity. Certain organisations such as the NCA, SFO or HMRC must show reasonable suspicion that the money is linked to criminal activity. They can apply for an AFO at a Magistrates’ Court. These orders, lasting up to two years, freeze the account, preventing any transactions without court approval. To protect their legal rights and assets, businesses and individuals facing an AFO can challenge or seek variation through legal representation.
HMRC have been using Horizon Data to raise tax assessments and tax penalties against innocent sub-postmasters. In one such case only after a six year battle when HMRC faced paying costs did they decide to withdraw their tax demands. Even now they refuse to recognise their misconduct should be punished by them paying indemnity costs and have threatened the sub-postmaster victim with a costs order simply for daring to ask for his full costs.
The Court of Appeal upheld the High Court’s dismissal of Manolete Partners’ £849,278 claim against director Ebrahim Dalal, finding the evidence for alleged unreported sales too weak to meet the civil standard of proof. The case underscores the evidential challenges liquidators face when pursuing directors for purported accounting deficiencies.
A HMRC Security Notice is a formal notice issued by HM Revenue and Customs (HMRC) to an individual or business requiring them to provide security for certain future tax liabilities. It is a tool used by HMRC where they believe there is a risk of tax loss.
In the case of Robert Don Hunter Dougan v HMRC [2022] TC8471, the First Tier Tribunal (“FTT”) ruled the taxpayer had not deliberately intended to cause a loss…
The recent case of Wyatt Paul v HMRC [2022] UKUT 116 (TCC) confirmed: permission by a party must be sought from the Upper Tribunal (UT) to argue a…
CORONAVIRUS (COVID-19): HMRC’S FAILURE TO PROCESS NHS UNIFORMED WORKERS CLAIMS FOR LAUNDERING UNIFORMS LONDON, UK – The HMRC Director General for Customer Services has taken and continues to…
HMRC has issued tax advice leaflets for banks to hand to customers receiving redress from mis-sold Interest Rate Hedging Products (IRHP), urging correct tax return reporting. Affected banks must review sales since 2001 under FCA supervision, leading to customer compensation. Redress payments, consisting of basic redress, 8% compensatory interest, and consequential losses, are generally taxable income or subject to capital gains tax. Individuals should account for tax deducted from interest. HMRC recommends consulting an accountant for complex scenarios.