UK authorities including the SFO, HMRC and police seized £179m last year from criminals using draconian Confiscation Orders – an increase of 16% on £154m a year earlier, according to analysis of new data by international law firm RPC.
Commenting on this, RPC partner and head of tax disputes, Adam Craggs, said: “Authorities are increasing their use of Confiscation Orders, which permit an individual’s assets to be seized if they are suspected to form part of a criminal lifestyle.”
There are growing concerns that Confiscation Orders have become too complicated, too unwieldy and potentially harmful to an individual’s right to justice. The Law Commission recently recommended a raft of reforms as to how these orders are used, including ensuring their use does not breach the Human Rights Act.
Craggs further noted that Confiscation Orders often start by making unreasonably large demands for assets – often including assets that may only have passed through an individual’s hands rather than been retained by them. If someone is unable to pay the sum demanded or use a specialist legal team to negotiate a reduced figure, they risk imprisonment.
Craggs added that another serious problem with the growing use of Confiscation Orders is that they can leave a defendant unable to pay for the specific legal advice they urgently need. He said: “Confiscation Orders are a hugely powerful weapon for bodies like HMRC and the SFO – but there are rising concerns that they have become too unbalanced against individuals.
“Far too many defendants are having to deal with Confiscation Orders without legal assistance. That can’t be right. A system that effectively takes away a defendant’s right to legal representation should be reviewed.
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“There are too many instances where authorities demand unreasonable sums of money from an individual. If that person isn’t in a position to use specialist lawyers to ensure authorities act reasonably, they can easily end up with a lengthy prison sentence.”
Authorities now retaining less of the assets seized
Data from the Home Office shows that authorities seizing assets from suspected criminals retained a smaller proportion in 2022 than in the previous year. Seized assets amounting to £118m were retained last year under the Asset Recovery Incentivisation Scheme (ARIS), a 17% reduction from £142m in 2021.
ARIS aims to push authorities towards greater use of asset seizures by allowing them to keep up to 50% of the money they appropriate under the Proceeds of Crime Act (POCA).
Craggs says that the wording of ARIS leaves significant scope for the government to retain a greater proportion of seized assets (up to 50%), which may become a more attractive option in the current economic climate.