CH20500 - Information & Inspection Powers: Overview: Covert surveillance
The guidance at CH20000 onwards covers information and inspection powers under Schedule 36 FA 2008. Note that information gathering is outside Schedule 36 and is governed by other legislation instead.
Specifically, note that Schedule 36 does not cover covert surveillance. This page outlines where you must look for guidance if your compliance work may involve covert surveillance.
Covert surveillance in compliance work
There may, on occasion be a a requirement to carry out covert surveillance. Covert surveillance may include ‘drive-bys’ or test purchases of goods or services.
In a cross tax environment, officers should consider a range of different approaches.
Drive-bys and walk pasts
This should be a single walk past or drive by of a business premises to make simple observations. The reasons for this could include the necessity to establish the size of a unit, to see if the business is trading, to determine the external condition of a shop, or to obtain details from shop signage. During this activity officers should not engage with people or third parties.
Test purchases/test eats
This involves the purchase of goods or services on the actual premises of the business. Activity should be limited to the systematic collection and storage of statistical or numerical business information, such as the number of diners and their method of payment.
Levels of covert surveillance required to observe a business activity can be found at CH207520.
When deciding if a test eat/test purchase is required caseworkers needs to consider a number of specific points
- Has HMRC used every other means available to address the risk identified?
- Is a test eat/purchase the only feasible method to substantiate the risk identified, such as the suppression of sale?
- Will the test eat/test purchase contribute substantially to the effective working of a compliance check and provide relevant information which otherwise would not be obtained?
- Will the test eat/test purchase be conducted in a public and safe environment and not put any HMRC officers at risk?
If all these point are met then a test eat/test purchase may be considered.
Before any planned activity proceeds officers will need to obtain agreement from an authorised officer, see CH260100
Regulation of Investigatory Powers Act 2000 (RIPA)
During the course of any surveillance activity such as test eats/test purchases, which is carried out purely to assess a level of business activity, it is highly unlikely to result in obtaining private information about an individual. This means that in most instances a directed surveillance authority will not be required.
However where private information is likely to be acquired in the course of making a test eat/test purchase, a directed surveillance authority must be applied for. If you are unsure if RIPA applies to your intended action please see the guidance at EM1806.
Where an officer is intending to carry out such activity, before the planned activity proceeds they will need to obtain agreement from an authorised officer, see CH260100, and consider whether
- the activity should be reported as surveillance that does not require authorisation under the Regulation of Investigatory Powers Act 2000 (RIPA), see CH207500, or
- the activity constitutes surveillance as defined in RIPA 2000, see the FIS Handbook.
How HRA applies to covert surveillance
The Human Rights Act incorporates the provisions of the European Convention on Human Rights into UK law.
Article 8 HRA, states that every-one has the right to respect for his private and family life, his home and his correspondence.
Privacy can extend to a person’s business activities and business premises.
Article 8 is a qualified right, so in certain circumstances public authorities can interfere with the private and family life of an individual. Interference must be in accordance with the law and have a legitimate aim - the economic well being of the country.
There must be a good reason for such interference and the level of interference must be proportionate.
These conditions would be met if,
- the activity is necessary for an officer to carry out their investigation effectively, and
- there is no other way to obtain the information,
- there may be loss of revenue to the treasury,
- other checks are undertaken before covert checks are considered,
- there is minimal interference on a worst case scenario with no or only low level personal information obtained