Tax collectors want power to swoop on homes and offices

Officials from the former Inland Revenue want the same powers as Customs officers following the merger of the two bodies two years ago.

The demand for the right to make surprise visits is included in a new consultation paper from Revenue and Customs.

In the document Revenue officials said raids might be needed in cases where "the taxpayer might decamp; or stock or other assets might be removed; or employees laid off or relocated or business records cosmetically tidied up for the occasion."

While the raids would normally be on business premises, homes could also be targeted if personal taxpayers had not provided information requested of them.

The tax officials making the raid would have the right to snoop around properties checking up on goods in packing cases — and could include the power to remove them.

However, some business groups have said the powers could be intimidating and costly for small companies.

Richard Baron, head of taxation at the Institute of Directors, said: "Having a heavy handed official coming round could be a nuisance."

Chas Roy-Chowdhury, of the Association of Chartered Certified-Accountants, said that smaller businesses would face extra costs because they would want the right to have their tax advisers with them to answer any questions.

"Smaller businesses do not have tax expertise in-house. They pay professional advisers by the hour," he said.

Customs & Revenue has come under increasing fire for flexing its muscles since the merger. Some tax officers have been given the power of arrest and the body is thought to have adopted a more aggressive stance generally.

But in this week's document the Revenue sought to reassure business that wherever possible it dealt with tax issues through correspondence and phone calls.

Most visits to premises would be arranged in advance, it said. The raids would only be made when an element of surprise was needed. It said officers needed "to obtain a first-hand impression of the business and how it operates" properly to check the accuracy of tax returns.