HMRC Dawn Raid: What to Do If HMRC Officers Arrive

If HMRC officers arrive at your business or home with a warrant, you are facing a criminal investigation. The next two hours can materially affect the outcome of that investigation. Knowing your rights, knowing what to do immediately and knowing what not to say can be the difference between a manageable situation and a catastrophic one. This guide sets out exactly what to do, step by step, if HMRC knocks on your door.

What a dawn raid is

An HMRC “dawn raid” is the colloquial term for the execution of a search warrant or production order at business or residential premises, typically at an early hour of the morning. The timing is deliberate: officers arrive when staff are present and computers are switched on, maximising the volume of accessible evidence before anyone has the opportunity to secure, move or delete material.

Dawn raids are conducted by HMRC’s Fraud Investigation Service (FIS) as part of a criminal investigation. They are not a civil investigation tool, if HMRC officers arrive with a warrant, you are the subject of a criminal inquiry. The same unit that handles Code of Practice 9 (COP9) civil investigations also conducts criminal operations, but a search warrant marks a clear choice: HMRC has taken the criminal route.

The legal basis for entry and search

HMRC officers do not have a general right of entry to search premises. They must have specific legal authority. There are two main instruments used in HMRC criminal investigations:

Search warrant under section 8 PACE 1984

A section 8 PACE warrant is obtained by HMRC applying to a magistrates’ court (or in some circumstances a Crown Court judge). The application is made without notice to the target (ex parte). The magistrate must be satisfied that there are reasonable grounds to believe that a serious arrestable offence has been committed, that evidence of the offence is on the premises and that a warrant is necessary because the evidence would not be obtained without one. The warrant authorises entry to the named premises, search of those premises and seizure of relevant material.

Production order under section 345 Proceeds of Crime Act 2002

A production order does not authorise entry and search of premises. Instead, it requires the holder of material (such as a bank, accountant or solicitor) to produce that material to HMRC. Production orders are frequently used to obtain banking records, financial statements and correspondence without the drama of a physical search. If you receive notification that a production order has been served on your bank or accountant, this is a significant indicator that a serious criminal investigation is under way, even if your own premises have not been searched.

For a broader discussion of HMRC’s investigation powers, see our guide to the HMRC criminal investigation process.

What HMRC officers can do

A valid section 8 PACE warrant authorises HMRC officers to:

• Enter and search the premises named in the warrant, using reasonable force if necessary (though force at entry is rare, most occupants allow entry voluntarily once the warrant is produced)
• Search for and seize items described in the warrant that are relevant to the investigation, documents, files, records, correspondence
• Seize computers, laptops, tablets, mobile phones and external storage devices and image hard drives and servers on site using specialist forensic equipment
• Photograph premises and the location of items before seizure
• Speak voluntarily with people on the premises , though those individuals have the right to decline to answer questions
• Examine material on premises to determine whether it falls within the scope of the warrant

Under section 50 Criminal Justice and Police Act 2001, officers can also seize material that cannot be conveniently examined on the premises to determine whether it is within the warrant’s scope, provided they return material that turns out to be outside scope.

What HMRC officers cannot do

A search warrant does not give unlimited powers. HMRC officers:

• Cannot enter premises not named in the warrant. If the warrant names your office address, officers cannot extend the search to your home, a storage unit or a third party’s premises without a separate warrant.
• Cannot exceed the scope of the warrant. The warrant will specify the nature of the evidence sought. Officers cannot seize material unrelated to the investigation.
• Cannot seize legally privileged material. Legal professional privilege (LPP) is an absolute right. Communications between a lawyer and client for the purpose of legal advice and documents prepared for the dominant purpose of litigation, are exempt. Where officers take privileged material, an application can be made for its return.
• Cannot compel you or your staff to answer questions in a criminal investigation. The right of silence applies. You cannot be required to incriminate yourself. Voluntary statements made during a search are admissible, which is why you should say as little as possible until a solicitor is present.
• Cannot use oppressive or intimidating conduct beyond that reasonably necessary to conduct the search.

Your immediate rights

When HMRC officers arrive with a warrant, you have the following rights from the outset:

• The right to see the warrant. Officers must produce it on request. Read it: check that it is signed by a magistrate, that it names the correct premises and that it has not expired.
• The right to contact a solicitor before cooperating with the search. Officers must permit a reasonable delay to allow you to call a solicitor. “Reasonable” in practice means a matter of minutes, not hours, but you can and should call immediately.
• The right to have a solicitor present during the search if one can attend in a reasonable time.
• The right to a list of seized items. Section 21 PACE 1984 requires HMRC to provide a written list of everything seized. Check it carefully and retain your copy.
• The right to apply for copies of seized material. Under section 21 PACE, you can request copies of material seized from you, subject to the investigation not being prejudiced.

Step-by-step: what to do when officers arrive

1. Ask to see the warrant immediately. Do not allow entry until you have seen it. Read it carefully: is it valid? Is it signed? Does it name these premises? Does it cover the material being sought? Note the name of the authorising magistrate and the date it was issued.
2. Call a solicitor immediately. Contact a specialist criminal defence solicitor with tax experience. HMRC should permit a short delay. Do not begin answering questions or allowing access beyond entry until your solicitor has been contacted. Many specialist firms offer 24-hour emergency lines precisely for this situation.
3. Cooperate with the physical search but answer no substantive questions. You may be asked simple administrative questions (your name, whether you work here) but you should decline to answer any substantive questions about the investigation, your accounts, transactions or conduct until your solicitor is present. Anything you say can and will be used as evidence.
4. Identify legally privileged material. If there are files, correspondence or electronic communications between you and your lawyers, identify them to the officers and state clearly that you believe they are legally privileged. Ask that they be set aside for independent review rather than seized.
5. Keep a record of what is seized. Officers are required to produce a seizure list. Check it carefully as the search concludes. Note any discrepancies. Ask for a receipt for electronic equipment taken.
6. Brief staff immediately. Tell them clearly: do not answer HMRC questions; refer all queries to you or the solicitor; say nothing about the business, its finances or any individuals. See the next section for further guidance on managing staff.

Managing staff during a search

Employees on the premises during a search are in a difficult position. They have done nothing wrong, they are frightened and HMRC officers may attempt to speak to them informally about the business. It is important that staff understand their position before any such event occurs and that they receive clear instructions if and when one does.

Staff should be told:

• They are not required to answer HMRC questions and should decline politely but firmly
• They should not provide access to any files, systems or records unless an officer produces a warrant that covers that material and even then, they should alert management before doing so
• They should note the names of officers they speak to and the questions asked
• Anything they say voluntarily to HMRC officers can be used as evidence
• They should remain calm, compliance with the physical search is required; answering questions is not

If staff are at risk of being separately invited to voluntary interviews under caution following the search, they should be advised to seek independent legal advice. For more on voluntary interviews, see our guide to HMRC voluntary interviews under caution.

After the raid: what happens next

Following the search, HMRC will retain all seized material for forensic analysis. Under PACE, officers can hold material for up to three months before making a decision to return it, extend the retention period (with court approval) or proceed to charge. In complex fraud investigations, retention is routinely extended.

You should take the following steps after the search concludes:

• Retain your copy of the seizure list and review it with your solicitor
• Apply under section 21 PACE for copies of documents needed to continue running your business, HMRC should accommodate reasonable requests
• If legally privileged material was taken, your solicitor should write immediately demanding its return and the appointment of an independent reviewer if HMRC disputes the privilege claim
• Do not attempt to reconstruct or recreate documents that were seized, this could be characterised as evidence tampering
• Brief your professional advisers (accountant, solicitor) fully and immediately

The investigation that follows the search will determine whether HMRC proceeds to charge. The period between search and any charging decision is typically months to years. During this time, you or your employees may be invited to voluntary interviews under caution, see our dedicated guide. For the full picture of what happens if HMRC proceeds to prosecution, see our guide to the HMRC prosecution process.

Related: HMRC criminal investigation overview , COP9 vs criminal investigation , POCA and tax investigations , our Fraud Investigation Service.

Frequently asked questions