The Inland Revenue was "charged with the duty of investigating offences" within s.67(9) Police and Criminal Evidence Act 1984 when conducting a "Hansard interview", so that Code C applied and the defendants should have been cautioned and a tape recording made of the interview. However, the Hansard evidence was introduced as lies told by the defendants relevant to their dishonest state of mind and its admission would not have had such an adverse effect on the fairness of the proceedings that the court ought not to have admitted it.Appeal by two defendants against convictions for cheating the Inland Revenue. The defendants were brothers whose parents came to the UK from the Punjab. From the early 1980s the defendants were running a business manufacturing clothing and investing in rental properties. In 1994 the Inland Revenue investigated the defendants' tax returns. In 1995 a "Hansard interview" took place at which the defendants were asked a set of standard questions as to: (i) whether the books of the business omitted any transactions, receipts or expenses; and (ii) whether the accounts and tax returns of the business submitted to the revenue and the defendants' personal tax returns were correct and complete to the best of the defendants' knowledge and belief. Under the Hansard procedure the Inland Revenue indicated that its practice when considering whether to accept a money settlement in a case of tax fraud or to prosecute was influenced by whether or not the taxpayer had made a full confession. The defendants said that nothing was omitted from the accounts and that the tax returns were correct. The Revenue's view was that the defendants were not telling the truth and it commenced a criminal investigation. The defendants were later charged with cheating the Revenue on the basis that, in tax returns and other documents submitted to the Revenue during the period 1984 to 1995, the defendants failed to disclose the existence of numerous bank accounts in the UK and offshore, thus concealing the extent of their financial assets and evading payment of substantial amounts of tax. At trial, the Revenue relied on the answers given at the Hansard interview as lies that supported the conclusion that the defendants dishonestly failed to disclose accounts they knew would expose them to liability for UK tax. The judge held that the Hansard interview was not subject to the requirements of Code C of the codes of practice under the Police and Criminal Evidence Act 1984 ('PACE') because it was part of a civil procedure and not part of a criminal investigation. The defendants were convicted. On appeal, they argued that the evidence of the Hansard interviews should have been excluded and that the judge had wrongly directed the jury on the domicile issue.HELD: (1) The defendants were suspected of serious fraud before the Hansard interview and it was because of that that the interview took place. When the Revenue was investigating tax fraud it was investigating a criminal offence. Contrary to the judge's view, the Revenue was charged with the duty of investigating offences within s.67(9) PACE when the Hansard interview was conducted so that Code C applied and the defendants should have been cautioned and a tape recording made of the interview. (2) The Hansard evidence was introduced as lies told by the defendants relevant to their dishonest state of mind. The admission of the evidence would not have had such an adverse effect on the fairness of the proceedings that the court ought not to have admitted it. There was a breach of Code C that was significant, but it was not caused by any bad faith and could not be characterised as involving a flagrant disregard of the code's provisions. (3) Section 105 Taxes Management Act 1970 contemplated that statements made at Hansard interviews could be admissible in evidence in some circumstances. (4) The principal purpose of the code was to ensure that interviewees did not make admissions unless they wished to do so. It was not to prevent interviewees from telling lies (R v Allen (2002) 1 AC 509. There was no unfairness in admitting the statements as lies provided that they were otherwise admissible and an appropriate direction was given, as was the case here. If a caution had been administered the defendants would not have acted any differently. (5) The judge correctly directed the jury on the domicile issue. The domicile defence depended on the jury's findings of fact. It could only succeed if the jury concluded that the moneys held off-shore had been generated offshore and never remitted to the UK. It was for the jury to decide whether each defendant intended to return to live in India permanently and therefore had not acquired a domicile of choice in the UK.Appeals dismissed.

[2003] EWCA Crim 2256