In a recent case we recovered over £200 000 for a client who found his bank account frozen under an Account Freezing Order (AFO) obtained by the police (without notice to him). As usual we did our due diligence on all funds coming in and out of the account to demonstrate that the funds were legitimate. However an enforcement agency can apply under section 3031Z Proceeds of Crime Act 2002 for an AFO to freeze a bank account if they have reasonable evidence that the funds in your account are ‘recoverable property’ which is defined as property obtained through unlawful conduct. If there has been an underpayment of tax to HMRC this could mean that a proportion of the funds in the account are recoverable property. This is because tax evasion if a criminal offence so the ‘tax element’ is viewed as unlawfully held funds and hence recoverable property. If there has been a failure to pay substantial tax due over a period of time this could trigger an application by an enforcement agency for an AFO. In our case we were able to file historic tax returns for our client and satisfy the historic tax demands leaving the remainder of ‘untainted’ funds to be released to our grateful client. So with substantial sums of money involved it is always worth considering whether tax is the issue!

If you require advice or just a conversation in confidence please call Winston Brown on 0208858 5996 or 07894219314 or email at winston.brown@brownandcosolicitors.co.uk