Case Nos: 2002/02208/Z2 and 2002/02211/Z2
Neutral Citation No: [2003] EWCA Crim 2256
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CRIMINAL DIVISION)
ON APPEAL FROM 
THE CROWN COURT AT SNARESBROOK
Royal Courts of Justice
Strand, London, WC2A 2LL

Date: 31 July 2003 

Before :

LORD JUSTICE CLARKE
MR JUSTICE ASTILL
and 
THE COMMON SERJEANT
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Between :

	REGINA	Respondent	
	- and –
		
	SEWA SINGH GILL and 
PARAMJIT SINGH GILL	Appellant	

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Mr Anthony Abell and Ms Valerie Charbit (instructed by the Commisioners of Inland Revenue) for the Respondent
Mr Phillip Sapsford QC (instructed by Stringer Saul) for the Appellants

Hearing date: 15 July 2003 
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JUDGMENT 
Lord Justice Clarke: 

Introduction
1.	This is the judgement of the court.  The appellants are brothers.  Sewa Singh is now aged 52 and Paramjit Singh is now 40.  On 15 March 2002 in the Crown Court at Snaresbrook before His Honour Judge Bing and a jury, after a lengthy trial, Sewa Gill was convicted of six counts of cheating the Inland Revenue (the Revenue”), namely counts 2, 3, 4, 6, 8 and 10, and Paramjit Gill was convicted of three counts of cheating the Revenue, namely counts 7, 9 and 11.  Sewa Gill was acquitted of counts 1 and 5 and found not guilty by direction of count 12 and Paramjit Gill was acquitted of count 13.  All those counts also alleged cheating the Revenue.  On 15 May 2002, Sewa Gill was sentenced to three years imprisonment on each count concurrent and Paramjit Gill was sentenced to twenty months imprisonment on each count concurrent.
2.	The appellants appeal against conviction pursuant to leave granted by the single judge, Sachs J, who granted leave on one ground only.  They renew their applications for leave to appeal on the remaining three grounds.  Paramjit Gill’s application for leave to appeal against sentence was refused by Sachs J and has not been renewed.  
3.	The ground upon which leave was granted relates to the use made at the trial of answers given by the appellants at an interview which took place on 8 March 1995.  It was a type of interview which is sometimes known as a “Hansard interview”.  The other three grounds in respect of which leave to appeal is sought allege misdirection by the judge in respect of the law of domicile and the legal concept of cheat and a failure by the judge to give clear directions as to the issues which the jury had to decide in relation to each count on the indictment.  Mr Sapsford made detailed oral submissions in relation to the Hansard interview and domicile but otherwise relied upon the written materials before the court.  Before considering each of the grounds relied upon we summarise the underlying facts and issues at the trial.
The Underlying Facts and Issues
4.	This is taken from the Criminal Appeal Office Summary.  The appellants were brothers and ran a business in partnership, sharing the profits equally.  The business dealt in clothing manufacture and investment in property for rent.  Its profits for the years 1983 to 1993 were said to have been between £13,648 and £61,229.  However, the prosecution case was that in tax returns and other documents submitted to the Revenue during the period 1984 to 1995 the appellants failed to disclose the existence of various bank and building society accounts in the United Kingdom and bank accounts in Switzerland and Jersey, thus concealing the extent of their financial assets and evading payment of the tax that would have been payable.  The prosecution case may be shortly summarised in this way.
5.	The Gills were a close family and some of the accounts in which assets were held were in the names of both one or other of the appellants and another family member.  The lengths to which they went to conceal these accounts, for example in creating false documentation, and the lies they told both when interviewed and at the trial of their former solicitor Ivor Gerber (at which they gave evidence for the Crown) showed an intent to defraud.  
6.	The prosecution maintained that the money in the case was generated in the United Kingdom by the appellants’ commercial activities and so was taxable here, wherever they were domiciled and whether or not it was kept offshore.  It did not accept that any of the money came from India.  In particular, it did not accept that it could realistically have been generated by the farm about which a good deal of evidence was given.  However it was not accepted that the appellants retained Indian domicile.  They lived and worked in the United Kingdom and never claimed that they were not domiciled in the United Kingdom in their dealings with the Revenue in connection with this case.  The purpose of doing so would have been in order to establish a claim that they were not liable for tax payable here on that basis.
7.	The defence accepted that the bank and building society accounts in question had not been disclosed but denied any intent to defraud.  The appellants were not domiciled in the United Kingdom but retained their domicile of origin, which was India.  They always had a clear and settled intention to return to India, where they had been born.  Not being domiciled in the United Kingdom, they were under no obligation to disclose the offshore accounts, the money in which came from India (especially from their mother’s farm in the Punjab).  They were able to provide good explanations for the failure to disclose the accounts in this country.  They produced financial records and accounts which they said showed that the business was not capable of generating the sort of money attributed to it and a schedule of rental income which showed that it had all been declared.  They admitted lying, but only in order to protect their elderly mother from investigation by the Indian Authorities, a consideration which lasted until her death in 2001.
8.	The appellants’ family were Sikhs from the Punjab.  Their grandparents lived in the UK and their parents came here when Sewa Gill was quite young.  Their father Naranjan Singh Gill, then returned to India and acquired a farm in the Punjab, while their mother, Surjit Kaur Gill, brought up the appellants and their sister Balbir.  Balbir worked as a dental assistant, then in 1976 married a Mr Ghuman and went to Canada, but returned to England following her divorce.  Naranjan Gill came back to England in 1981 but the farm remained in the family.  In the early 1980s Sewa Gill, who had previously worked as a diesel fitter, set up in business as a clothing manufacturer.  He originally did so under the name of Smaks of London, although the name was changed to Club Tropicana in 1986.  He banked at the National Westminster Bank in Barking.  Paramjit Gill (also referred to as “Bob”) was not involved in setting up the business but joined it as Sewa Gill’s partner at an early stage.  He dealt with the bookkeeping and the receipt of money.
9.	The Revenue first made enquiries as a result of tax returns submitted by Sewa Gill at the end of 1984 because they showed an unexplained injection of capital into the business.  Further investigations followed tax returns submitted in March 1994.  The accounts specified in the indictment were: accounts in the joint names of the two appellants at the Woolwich Building Society, the Bank of Ireland in Ilford, the Royal Bank of Scotland AG in Zurich, Handelsbank (a subsidiary of the NatWest) in Zurich and the Bank of Ireland in Jersey; an account at the Royal Bank of Scotland AG in Zurich in the name of Firola, a Luxemburg registered company (the documentation for which was signed by the appellants); an account at the Bank of Ireland in Jersey in the joint names of Sewa Gill and his mother; and two National Savings Bank accounts, one in the joint names of Paramjit Gill and his sister, and one in his sole name.
10.	Counts 2, 6 and 7 concerned tax returns submitted in 1984 and 1994, on which interest earned from certain bank and building society accounts was not declared.  Counts 3, 4, 10 and 11 concerned statements of assets and liabilities delivered to the Inspector of Taxes in 1985 and 1995, on which details of certain bank and building society accounts were not disclosed.  Counts 8 and 9 concerned statements of bank and building society accounts delivered to the Inspector of Taxes in 1995, on which details of certain bank and building society accounts were not disclosed.
11.	The loss to the Revenue (according to evidence in the related confiscation proceedings) was stated to be £511,177.35 in the case of Sewa Gill and £23,457.21 in the case of Paramjit Gill.  We understand that confiscation orders made in those proceedings are the subject of applications for leave to appeal but they are not relevant to the issues in this appeal.  With that introduction we turn to consider the points raised in the appeal.
Hansard Interview
12.	So far as we are aware, a Hansard interview is unique to investigations carried out by the Inland Revenue.  As already stated, a Hansard interview took place on 8 March 1995.  Present were both the appellants and three representatives of the Revenue, namely Mr Cole, Mr Fellows and Mr Cooper, all of whom worked for the Special Compliance Office (“SCO”), which is the Revenue’s investigation branch charged with investigating serious fraud.  Mr Cole and Mr Fellows were investigators and Mr Cooper was an accountant.  Although the interview was not recorded on tape, Mr Cole made notes.
13.	The relevance of the interview in this appeal is that in the course of it the appellants made a number of statements which the prosecution (which was of course the Revenue) sought to rely upon at the trial.  It is important to note that it did not rely upon what was said as evidence of truth which amounted to a confession or an admission or a statement against interest.  It relied upon the statements as lies which supported the conclusion that the appellants dishonestly failed to disclose accounts which they knew would expose them to liability for United Kingdom tax.  We will return to the relevance of that reliance below.  
14.	The appellants submitted that what they had said in the interview ought to have been excluded (as we understand it) under section 78 of the Police and Criminal Evidence Act 1984 (“PACE”).  Counsel then appearing for them submitted that Code C of the Codes of Practice issued under PACE applied and that, since it was common ground that the provisions of Code C had not been followed, the judge should exclude the evidence on the ground that the admission of the evidence would (in the words of section 78) have such an adverse effect on the fairness of the proceedings that the court ought not to admit it.
15.	That submission logically gave rise to two separate questions.  The first was whether Code C applied and the second was whether, if so, the evidence upon which the prosecution sought to rely should be excluded under section 78.  Although the judge did not expressly advert to code C, he treated the question as being whether a caution should have been administered and thus may, we think, be taken as having considered the question whether Code C applied.  In any event he held that, having regard to the history and practice of Hansard interviews, they were part of a civil procedure to collect tax and not part of a criminal investigation.  In reaching that conclusion he considered the important decision of the House of Lords in R v Allen [2001] UKHL 45, [2002] 1 AC 509.  Mr Sapsford QC, who appears for both appellants on this appeal but did not appear at the trial, submits that the judge was wrong so to hold.  Mr Abell submits that the judge was correct but that, in any event, we should hold that the evidence was properly admitted because it was probative and would not have such an adverse effect on the fairness of the proceedings that it would or should have been excluded under section 78.  We will consider those points in turn in the context of the Hansard interview and its history.
The Hansard Interview and its History
16.	Before considering the application or otherwise of Code C, it is appropriate to refer briefly to the nature of a Hansard interview, set in its historical context.  It is a somewhat curious expression.  At the time of the interview in this case on March 8 1995 the interview was conducted in accordance with the practice set out in a reply to a Parliamentary Question given by the Chancellor of the Exchequer (Mr John Major) on 18 October 1990.  In the communication subsequently prepared by the SCO the Chancellor was stated to have given “the following answer regarding tax fraud”:                       
“The practice of the Board of Inland Revenue in cases of tax fraud is as follows:
1.	The Board may accept a money settlement instead of instituting criminal proceedings in respect of fraud alleged to have been committed by a taxpayer.
2.	They can give no undertaking that they will accept a money settlement and refrain from instituting criminal proceedings even if the case is one in which the taxpayer had made a full confession and has given full facilities for investigation of the facts.  They reserve to themselves full discretion in all cases as to the course they pursue.
3.	But in considering whether to accept a money settlement or to institute criminal proceedings, it is their practice to be influenced by the fact that the taxpayer has made a full confession and has given full facilities for investigation into his affairs and from examination of such books, papers, documents or information as the Board may consider necessary.
The above statement of practice should be regarded as replacing the one given by the then Chancellor of the Exchequer on 5 October 1944.”
17.	As we understand it, the SCO followed the ordinary practice in this case.  It asked the appellants to agree to an interview and asked them a number of questions.  It also asked them to answer a set of standard questions as follows:
“1.	In regard to any business with which you have been concerned either as a director, partner or sole proprietor,
a.	Have any transactions, receipts or expenses been omitted from or incorrectly recorded in the books thereof?
b.	Are the accounts sent to the Inland Revenue correct and complete to the best of your knowledge and belief?
c.	Are all taxation returns correct and complete to the best of your knowledge and belief?
2.	Are all your personal taxation returns correct and complete to the best of your knowledge and belief?
3.	Are you prepared to allow an examination of all business books, business and private bank statements and other business and private records in order that the Revenue may be satisfied that your answers to the first two questions are correct?”
18.	As can be seen from the Chancellor’s statement in October 1990, it replaced an earlier statement made to Parliament on 5 October 1944.  That statement had in turn replaced the first of the statements, which had been made on 19 July 1923.  The 1990 statement was in some respect significantly different from the earlier ones.  In 1923 the then Financial Secretary to the Treasury (Sir W Joynson-Hicks) said that where a taxpayer voluntarily disclosed “the fact of his past frauds and their full extent” the Revenue would not institute criminal proceedings but would accept a pecuniary settlement.  Even in a case where the taxpayer had previously furnished “false and fraudulent particulars”, if he subsequently made a “voluntary or quasi-voluntary disclosure”, the Revenue would not refuse to accept a pecuniary settlement, although his previous fraudulent replies would be regarded as relevant to determining the amount of the financial penalty.
19.	In 1942 the Court of Criminal Appeal decided the case of R v Barker [1941] 2 KB 381, where the facts were shortly these.  The Revenue read a statement to the above effect reflecting the 1923 statement, whereafter the appellant produced two ledgers which had been fraudulently prepared in order to induce the Revenue to believe that the irregularities amounted to only £7,000.  This court held that the statement by the Revenue, which reflected the statement in Parliament, was partly a promise or an inducement and that it was not admissible on a charge of conspiring to cheat the Revenue by producing false statements of account.  It held, as Tucker J put it at p 385, that 
“those documents stand on precisely the same footing as an oral or written confession which is brought into existence as the result of such a promise, inducement or threat.”
20.	The government of the day soon took steps to change the law as so stated and on 5 May 1942 the then Financial Secretary to the Treasury (Sir K Wood) told the House of Commons that, in the light of the decision in Barker, the 1923 statement was withdrawn.  The reason he gave was that, whereas cases had occurred in which taxpayers, having promised full disclosure, deliberately withheld essential information, and until then criminal proceedings had been taken against the taxpayer, the decision in Barker made it practically impossible to institute proceedings where a taxpayer, purporting to act on the basis if the 1923 statement, deliberately held back information and only made partial disclosure.  
21.	The statement of practice in 1942 was in some respects similar to the 1923 statement but included a statement to the effect that, if any taxpayer furnished information in relation to any fraud, he must clearly understand that such information would be available, if necessary, to deal with the situation in which a taxpayer undertook to make a full disclosure but deliberately held back information with the intention of deceiving the Revenue as to his true liability.  The statement added that it was for that reason that a new section was to be added to the Finance Bill.
22.	That section, originally enacted as section 34 of the Finance Act 1942, subsequently became section 105 of the Taxes and Management Act 1970 (“the 1970 Act”), which Lord Hutton said in paragraph 32 of his speech in Allen (with which the other members of the House of Lords agreed) reversed the effect of the decision in Barker.  Section 105, as amended by various provisions of the Finance Act 1989, provides:
“(1)	Statements made or documents produced by or on behalf of a person shall not be inadmissible in any such proceedings as are mentioned in subsection (2) below by reason only that it has been drawn to his attention that –
(a)	pecuniary settlements may be accepted instead of a penalty being determined, or proceedings being instituted, in relation to any tax,
(b)	though no undertaking can be given as to whether or not the Board will accept such a settlement in the case of any particular person, it is the practice of the Board to be influenced by the fact that a person has made a full confession of any fraudulent conduct to which he had been a party and has given full facilities for investigation,
and that he was or may have been induced thereby to make the statements or produce the documents.
(2)	The proceedings mentioned in subsection (1) above are- 
(a) 	any criminal proceedings against the person in question for any form of fraudulent conduct in connection with or in relation to tax, and
(b)	any proceedings against him for the recovery of any tax due from him, and
(c)	any proceedings for a penalty or on appeal against the determination of a penalty.”
23.	In Allen, count 11 of the indictment, which alleged cheating the Revenue, asserted that, in a schedule of assets provided by the appellant to the Revenue during the course of a Hansard investigation and pursuant to a notice issued under section 20(1) of the 1970 Act, he omitted to list his beneficial interest in shares issued by offshore companies.  In the House of Lords it was argued on behalf of the appellant that the schedule was inadmissible.  Reliance was placed upon the privilege against self-incrimination, and in that connection upon article 6 of the European Convention on Human Rights, upon sections 7(1)(b) and 22(4) of the Human Rights Act 1998 and upon Saunders v United Kingdom (1996) 23 EHRR 313.  Reliance was also placed upon the decision in Barker in support of the submission that the statements in the schedule stood (as it was put by Tucker J) on precisely the same footing as an oral or written confession which is brought into existence as the result of such a promise, inducement or threat.  
24.	The House of Lords held that it was not necessary to consider the alleged breach of article 6 because the Human Rights Act did not have retrospective effect.  However, the House of Lords considered and rejected the above submissions.  It did so by reference to the principle that, when the courts have excluded a confession because it was involuntary having been obtained by an inducement, they have done so on the ground that it was unsafe to rely on the confession as being true.  See the speech of Lord Hutton at paragraph 34, where he quoted a well-known statement to that effect by Lord Sumner in Ibrahim v R [1914] AC 599 at pp 610-611.
25.	The essential reasons for the decision on this point in Allen can be seen from paragraph 35 of Lord Hutton’s speech:
“However in Barker and in this case the respective accused did not give information contained in the documents and the schedule respectively which the Crown claimed was true, both accused gave false information and were prosecuted for giving that false information.  To the extent that there was an inducement contained in the Hansard statement, the inducement was to give true and accurate information to the revenue, but the accused in both cases did not respond to that inducement and instead of giving true and accurate information gave false information.  Therefore, in my opinion, the appellant’s argument in this case that he was induced by hope of non-institution of criminal proceedings held out by the revenue to provide the schedule and that its provision was therefore involuntary is invalid.  If, in response to the Hansard statement, the appellant had given true and accurate information which disclosed that he had earlier cheated the revenue and had then been prosecuted for that earlier dishonesty, he would have had a strong argument that the criminal proceedings were unfair and an even stronger argument that the Crown should not rely on evidence of his admission, but that is the reverse of what actually occurred.”
It can be seen from that paragraph that the House of Lords rejected the suggestion that a response to a section 20 notice in the context of the Hansard procedure under the 1990 statement is inadmissible as being akin to a confession which is brought into existence as the result of a promise, inducement or threat.  Importantly, however, a distinction was drawn between that situation and one where the appellant had given true information that he had cheated the Revenue and then been prosecuted.  In that event Lord Hutton thought that he would have a strong argument that the Crown should not be permitted to rely upon the evidence of his admission.  It is not perhaps absolutely clear whether that was under section 76 or section 78 of PACE or, indeed, at common law.         
26.	On 10 September 2002, which was of course after the trial in the instant case, the European Court of Human Rights (“ECHR”) rejected an application in the case of Allen (no 76574/01) as being inadmissible.  Both the self-incrimination point and the inducement point were advanced on behalf of the applicant.  The court’s reasons included the following:
“The Court notes that in this case the applicant does not complain that the information about his assets which he gave the Inland Revenue was used against him in the sense that it incriminated him in the commission of an offence due to acts or omissions in which he had been involved prior to that moment.  His situation may therefore be distinguished from that of the applicant in Saunders …  The applicant was charged with and convicted of the offence of making a false declaration of his assets to the Inland Revenue.  In other words, he lied, or perjured himself through giving inaccurate information about his assets.  This was not an example of forced self-incrimination about an offence which he had previously committed; it was the offence itself.  It may be that the applicant lied in order to prevent the Inland Revenue uncovering conduct which might possibly be criminal and lead to a prosecution.  However, the privilege against self-incrimination cannot be interpreted as giving a general immunity to actions motivated by the desire to evade investigation by the revenue authorities.”
27.	The ECHR then noted that there was a distinction between the penalty of £300 for refusing to make a declaration of assets and the penalty of up to two years imprisonment for refusing to answer questions in Saunders and added:
“Nor does the Court consider that any improper inducement was brought to bear through the use of the so-called “Hansard Warning” which informed the applicant of the practice of the Inland Revenue of taking into account the co-operation of the taxpayer in deciding whether to bring any prosecution for fraud.  There is no indication that the applicant was misled as to the effect of the warning, accepting that it could not be interpreted as any kind of guarantee of freedom from prosecution.
Consequently, the Court does not find that the facts of this case disclose any infringement of the right to silence or privilege against self-incrimination or that there has been any unfairness contrary to Article 6 § 1 of the Convention.”
28.	It should be noted that in Allen the House was not considering whether evidence should be excluded under section 78 of PACE.  Nor was there any consideration of the question whether Code C applied or whether the Revenue should have administered a caution before asking any questions or submitting a questionnaire.  We return to that possible distinction below.         
PACE and Code C
29.	Section 66(1)(b) of PACE provides for the issue of codes of practice in connection with “the detention, treatment, questioning and identification of persons by police officers”.  The relevant code in this regard is Code C.  Section 67(9) provides:
“Persons other than police officers who are charged with the duty of investigating offences or charging offenders shall in the discharge of that duty have regard to any relevant provision of such a code.”
30.	In Okafor (1994) 99 Cr App Rep 97 it was held that Code C applied to customs officers as it does to police officers.  Here it is correctly conceded that in appropriate circumstances the code applies to SCO officers, but Mr Abell submits that the code did not apply to the officers who attended the Hansard interview of 8 March 1995 because the time when it would apply had not yet arrived.
31.	He submits that Mr Cole and Mr Fellows were not yet “charged with the duty of investigating offences or charging offenders” within the meaning of section 67(9) of PACE.  He also relies upon the express terms of the edition of Code C which was in force at the time of the interview.  In particular he relies upon paragraph C: 10.1, which was in these terms:
“A person whom there are grounds to suspect of an offence must be cautioned before any questions about it (or further questions if it is his answers to previous questions that provide grounds for suspicion) are put to him for the purpose of obtaining evidence which may be given to a court in a prosecution.  He therefore need not be cautioned if questions are put for other purposes, for example, to establish his identity or his ownership of any vehicle or the need to search him in the exercise of powers of stop and search.”
Mr Abell submits that the officers were not putting questions at the Hansard interview “for the purpose of obtaining evidence which may be given to a court in a prosecution”.
32.	We note in passing that in the edition of Code C which came into effect on 10 April 1995, which was just over a month after the interview in this case, paragraph 10.1 had been amended to read as follows:
“A person whom there are grounds to suspect of an offence must be cautioned before any questions about it (or further questions if it is his answers to previous questions which provide the grounds for suspicion) are put to him regarding his involvement or suspected involvement in that offence if his answers or his silence (ie failure or refusal to answer a question or to answer satisfactorily) may be given in evidence to a court in a prosecution.  He therefore need not be cautioned if questions are put for other purposes, for example, solely to establish his identity or his ownership of any vehicle or to obtain information in accordance with any relevant statutory requirement (see paragraph 10.5C) or in furtherance of the proper and effective conduct of a search, (for example to determine the need to search in the exercise of powers of stop and search or to seek cooperation while carrying out a search) or to seek verification of a written record in accordance with paragraph 11.13.”
We accept Mr Abell’s submission that the question in this case must be judge by reference to the earlier edition of the code.
33.	Mr Abell concedes that the appellants were suspected of serious fraud before the interview and that it was because of that fact that the interview took place.  It is plain from the available material that that concession is correctly made.  However, he submits that the appellants were properly informed as to the nature of a Hansard interview and that code C did not apply.  In accordance with what we understand was normal practice, the appellants were sent a leaflet explaining the role of the SCO.  They were also recommended to consider having professional representation at the meeting.  The appellants considered having their accountant present but decided not to.
34.	Although we have not seen the leaflet IR120 which was sent to the appellants, we have seen the equivalent leaflets which are in use now.  Code of Practice 8 (“COP 8”) relates to SCO investigations where serious fraud is not suspected, whereas COP 9 relates to SCO investigations in respect of “cases of serious fraud”.  COP 9 includes the following:
“Introduction:
This Code of practice tells you how the Special Compliance Office will carry out investigations into cases where serious fraud is suspected and the investigation is not being conducted with a view to criminal prosecution.
Most taxpayers pay what is due and others make genuine mistakes.  If we suspect someone is deliberately trying to pay less tax, we will conduct a thorough investigation.
We want taxpayers to pay the right amount of tax.
This Code of Practice covers cases where we suspect serious fraud and gives you the opportunity to fully disclose any irregularities in your tax affairs.  It tells you how we carry out investigations and promises that we will treat you fairly and courteously in accordance with the law and ‘Our Service Commitment to you’ (see inside of back cover).
The Board of Inland Revenue has complete discretion to pursue prosecutions in the circumstances it considers appropriate.  Where serious tax fraud has been committed the Board may however accept a money settlement instead of pursuing a criminal prosecution.
If at any time the Board decides that a criminal investigation is appropriate, this Code of Practice will cease to apply.  We will then conduct the investigation under
•	the Police and Criminal Evidence Act 1984
•	the Criminal Procedure & Investigations Act 1996, and
•	their respective Codes of practice.
In Scotland and Northern Ireland we will conduct any criminal investigation under the law applicable in those parts of the United Kingdom.  …..
General
“We will investigate any situation where we suspect serious tax fraud.  This includes the tax affairs of individuals, partnerships and companies.  We set high standards for the way we work.  This code describes how we give you an opportunity to tell us what, if anything, is wrong with your tax affairs and how you can disclose any irregularities.”
35.	It can be seen from COP 9 that it is now made clear to the taxpayer suspected of fraud that the Revenue is not at that time carrying out a criminal investigation but reserves the right to do so in the future.  Although we have not seen the document sent to the appellants, we understand that it drew a similar distinction.  Mr Abell submits that such a document underlines his submission that those carrying out a Hansard interview are not “charged with a duty of investigating offences or charging offenders” within the meaning of section 67(9) of PACE and that the questions were not put “for the purpose of obtaining evidence” within the meaning of paragraph 10.1 Code C in the form then in force.
36.	The judge accepted that submission.  He held that the Hansard interview was part of a civil process designed to gather in money and not a criminal investigation.  As we read his ruling, he formed the view that, if Parliament had taken the view that a caution was required it would have so provided when it enacted section 105 of the Taxes Management Act 1970.  In short the judge took the view that the Hansard interview was part of a separate well understood form of proceeding outside the scope of Code C.                     
37.	While we fully understand the importance of the Revenue being able to recover the tax owed to it and the value of the Hansard procedure in that regard, we are unable to accept the Revenue’s submission.  The statement of the Chancellor of the Exchequer made in Parliament on 18 October 1990 makes it quite clear that, while in cases of tax fraud the Revenue will be influenced by a full confession in deciding whether to accept a money settlement (including presumably an appropriate penalty), it gives no undertaking to do so or to refrain from instituting criminal proceedings.  Tax fraud involves the commission of a criminal offence or offences, so that it is in our view evident that the role of the SCO investigating tax fraud involves the investigation of a criminal offence.
38.	Although we recognise that a caution had not been administered in the past at a Hansard interview because such an interview has not been regarded by the Revenue as subject to Code C, in our judgment, that is to give too narrow an interpretation of the expression “charged with the duty of investigating offences” in section 67(9) of PACE.  The officers of the SCO were charged with investigating serious fraud and, since serious fraud inevitably involves the commission of an offence or offences, it seem to us to follow that they were charged with the duty of investigating offences.  
39.	The purpose of Code C is to ensure that interviewees are informed of their rights, one of which is not to answer to questions, and to inform them of the use which might be made of their answers in criminal proceedings.  It is clear from the Parliamentary statement that the SCO had the possibility of criminal proceedings in mind in respect of the fraud about which they were asking questions and we can see no reason why the Revenue should not have cautioned taxpayers suspected of fraud before asking them questions in these circumstances.  We cannot see why a caution should reduce the chances of a taxpayer making a full confession, which was the purpose of the process.  However that may be, since the Revenue expressly reserved the right to prosecute for fraud, it appears to us that one of the purposes of asking the questions must have been the “obtaining of evidence which may be given to a court in a prosecution”, even if the Revenue’s main aim was to arrive at a monetary settlement.
40.	For these reasons we have reached a different conclusion from the judge and hold that Code C applied to the Hansard interview conducted on 8 March 1995 and that the appellants should have been cautioned and a tape recording made of the interview.  The question then arises whether the evidence of what the appellants said at the interview should have been excluded under section 78 of PACE on the ground that its admission would have such an adverse effect on the fairness of the proceedings that the court ought not to admit it.  We turn to that question.
Section 78 of PACE

41.	It does not follow from the conclusion that Code C applied and that no caution was administered or tape recording made in breach of paragraph 10.1 that evidence of everything said by the appellants at the meeting must be excluded.  The principles are stated in this way in paragraph 15-15 of Archbold 2003, by reference to R v Absolam 88 Cr App Rep 332 and R v Delaney 88 Cr App Rep 338:
“They are as follows: (a) a breach of a code does nor lead automatically to exclusion (Delaney); (b) where there is a breach, the judge has a discretion to exclude the evidence (Absolam/Delaney); (c) the breach must be significant and substantial, and the more so, the more likely the judge is to exclude the evidence (Absolam); (d) bad faith/flagrant disregard of the codes’ provisions will make exclusion more likely (Delaney); (e) the test to be applied is the section 78 test (R v Grannell 90 Cr App Rep 149); (f) in applying the test, the judge should have regard to the rationale of the provisions of the code … and the extent to which the breach is likely to defeat the rationale (Delaney); (g) if there is a breach but the judge admits the evidence, he should give reasons for doing so: R v Allen [1995] Crim LR 643, (an identification case); (h) if the evidence is allowed in despite the breach, the judge should explain the significance of the breach to the jury, as it may go to the weight they attach to the evidence (see R v Graham [1994] Crim LR 212 and R v Quinn …” [1995] 1 Cr App Rep 480.
42.	The opinion stated by Lord Hutton in paragraph 35 suggests that reliance upon the truth of a statement made at an interview may well not be admissible.  It appears that he took that view notwithstanding section 105 of the 1970 Act.  It may well be that one of the reasons for such a conclusion would be a breach of paragraph 10.1 of Code C.  However, that question does not arise here because the Revenue did not seek to introduce statements by the appellants as true.  It sought to introduce the statements as lies told by the appellants, in that they denied that there were any irregularities in their tax affairs and denied the existence of certain offshore accounts the existence of which the Revenue said could be proved at trial.  It was submitted that the lies were relevant to the dishonest state of mind adopted by the appellants.  
43.	It was not, as we understand it, submitted on behalf of the appellants that, if the evidence was not excluded under section 78, the Revenue was not entitled to rely upon it in that way.  The judge subsequently summed up the statements made at the Hansard interview, and indeed on other occasions, by giving an appropriate Lucas direction and no complaint is made about the nature of that direction.
44.	We have reached the conclusion that 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 which we would characterise as significant but it was certainly not caused by any bad faith and could not fairly be regarded as involving a flagrant disregard of the code’s provisions.  The Revenue took the view that code did not apply because a criminal investigation was not under way.  It did not institute such an investigation until about 30 November 1995.  It regarded the Hansard interview as essentially a civil procedure and, it may be noted, the judge agreed.  We have formed a different view but we do not regard the Revenue’s contrary opinion as in any way irrational.
45.	Section 105 of the 1970 Act contemplates that statements made at Hansard interviews may be admissible in evidence.  Although section 105 does not in our judgment prevent reliance upon failure to comply with Code C because a statement ruled inadmissible under section 78 would not be inadmissible “by reason only” (our emphasis) of the two matters referred to in paragraphs (a) and (b) of section 105(1) quoted above, it is we think relevant to the exercise of the discretion under section 78 that Parliament expected such statements to be admissible in some circumstances.
46.	The rationale of paragraph 10.1 of Code C is that already stated, namely to ensure that interviewees are informed of their rights, one of which is not to answer questions, and to inform them of the use which might be made of their answers in criminal proceedings.  However, it seems to us that the principal purpose of such a procedure is to ensure, so far as possible, that interviewees do not make admissions unless they wish to do so and are aware of the consequences.  We do not think that the principal purpose of the code is to prevent interviewees from telling lies.  That is not to say that lies told by a person at an interview to which Code C applies will always be admissible where there is a breach of the code.  Each case depends upon its own facts but, here, we can see 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.
47.	The appellants were fully informed as to the purpose of the interview and warned that even if they made a full confession the Revenue reserved the right to take criminal proceedings against them.  Such proceedings would plainly not potentially be limited to proceedings for a penalty, so that it is not necessary for us to consider whether such proceedings would involve the determination of a criminal charge, although it seems likely that they would: see eg Han v Commissioners of Customs and Excise [2001] 4 All ER 721.  The appellants were thus aware that criminal proceedings were in prospect.  They were advised on several occasions to have professional representation at the interview but chose not to do so.  
48.	They must have known that they were not obliged to answer the questions.  On the Revenue case, the same can be said here as was said by Lord Hutton in paragraph 35 of his speech in Allen: 
“To the extent that there was any inducement contained in the Hansard statement, the inducement was to give true and accurate information to the revenue, but the accused in both cases did not respond to that inducement and instead of giving true and accurate information gave false information.”
We do not think that it is arguable that, if a caution had been administered, the appellants would have done anything different from what they did.  They had time to consider their position.  We accept Mr Abell’s submission that responses to questions at the Hansard interview could have been delayed.  Instead, each of the appellants answered the standard questions set out in paragraph 17 above, no, yes, yes, yes and yes.  Thus each said that no transactions, receipts or expenses had been omitted from the books and that all accounts and tax returns sent to the Revenue were correct and complete to the best of his knowledge and belief.   The Revenue’s case at the trial was that those answers were dishonest and untrue.  We do not think that there was anything unfair about allowing the Revenue to rely upon those lies if it was otherwise appropriate.
49.	As indicated above, Mr Cole made notes of what was said at the meeting.  Although there was no tape recording, so far as we are aware it is not suggested that the notes were in any material respect inaccurate.  After recording the answers to the questions, Mr Cole’s note includes the following in paragraph 8:
“Cole said that given the fact that there was no professional representation at the meeting and the importance attached to the Gills response to the questions, he would await their written response within seven days.  Fellows said that their verbal responses effectively denied that there were any irregularities under the Hansard policy.  Cole explained that if that was the written response submitted in due course, then the Revenue would investigate the matter in order to satisfy itself that there were no irregularities.  Cole added that if it subsequently was established that the responses to the Hansard questionnaire were incorrect, then serious consequences could ensue.  Both Gills confirmed that they understood the position but would need to discuss their responses with their professional advisers as soon as possible.”
At the end of the interview, after the appellants had answered a number of specific questions, Mr Fellows said that he knew that the truth had not been told at the meeting and that, if no disclosure was made the Revenue would commence its own investigation and look for the evidence to prosecute. 
50.	After the interview the appellants were sent Mr Cole’s notes so that they could check the accuracy and sign them but they did not reply to several letters asking them to do so.
51.	Mr Sapsford submits that it was unfair to admit what was said for two further reasons.  The first was that the Revenue did not inform the appellants of all the information in their possession before the interview began.  He relies both on information available at the trial and on information which has been disclosed for the purposes of this appeal.  It is correct that the documents show that the Revenue did not disclose the detailed nature of its suspicions before the interview but, in our judgment, it was not bound to do so and there was nothing unfair in its not doing so.  A defendant in a criminal trial is of course entitled to know what case he has to meet so that he has an opportunity to meet it but, it does not follow that an investigator is bound to reveal all the facts known to him at each stage, provided that he does not mislead the interviewee in any material way.  We are not persuaded that the Revenue misled the appellants at the interview and we can see no reason why the Revenue should not have asked the questions it in fact asked without disclosing more than they in fact did.  There is in any event no arguable case that the appellants told the alleged lies as a result of any such non-disclosure.
52.	We also observe in this regard that the failure to disclose the documents now disclosed before the trial does not, in our judgment, affect the safety of the convictions.  Finally, there was a suggestion in the course of argument that there was no equality of arms between the Revenue and the appellants.  We reject that submission.  The Hansard interviews were fairly conducted, as were the later interviews referred to below, and the appellants had full and entirely adequate representation both at the trial and in this court.     
53.	The second reason was that, when the appellants were later interviewed under caution at Chingford police station between 22 April and 28 October 1997, they should not have been asked questions about the answers given by them in the Hansard interview.  We do not accept that submission.  During an interview under caution, depending upon the circumstances of the particular case, it is permissible to ask questions regarding previous oral statements made by the suspect, whether at an earlier interview under caution or otherwise.  We can see nothing unfair about such questions being asked on the facts of this case.       
54.	In short, we have reached the conclusion that the admission of the statements made in the interview did not have such an adverse effect on the fairness of the proceedings that the court ought not to have admitted it.  Indeed, we do not think that it had any adverse effect on the fairness of the proceedings.  The appellants chose to tell lies, if that is what they were; the appellants had every opportunity at the trial to explain why they had answered as they did; the jury were correctly directed as to the correct approach; and we have reached the conclusion that there was nothing unsafe about the convictions in this regard. 
55.	We would add three points.  The first is that, since the judge did not consider this question separately, he did not of course give reasons for a decision but we have now given the reasons why the evidence was properly admitted.  The second is that for the same reason the judge did not explain the significance of the breach of the code to the jury.  The reason given in point (h) in the extract from Archbold quoted above is that it may go to the weight to be attached to the evidence.  That is apparent in an identification case, but less clear here.  It is difficult to see how such a direction could have helped the jury in deciding whether lies were told or the significance of them (if any).  We do not think that the absence of such a direction even arguably makes these convictions unsafe.
56.	The third point is that it seems to us that the conclusion we have reached is consistent with the approach, not only of the House of Lords in R v Allen, but also of the European Court of Human Rights in the passages from the same case quoted above.
57.	For these reasons the only ground upon which leave to appeal was granted by the single judge fails.
Domicile
58.	This is the only point contained in the grounds considered by the single judge in respect of which leave was not granted that Mr Sapsford advanced by way of oral argument.  He submits that the judge misdirected the jury on the issue of domicile.  He submits that it was for the Revenue to prove that each appellant was domiciled in the United Kingdom and that the judge failed correctly to direct the jury in this regard.
59.	Mr Sapsford correctly submits that domicile is different from nationality or residence.  As we see it, the general position may be summarised in this way.  Every person has a domicile of origin which he retains unless and until he acquires a domicile of choice.  Mr Sapsford draws our attention to a passage in the judgment of Simon P in Henderson v Henderson [1967] P 77 at p 80, which includes the following:
“First, clear evidence is required to establish a change of domicile.  In particular, to displace the domicile of origin in favour of the domicile of choice, the standard of proof goes beyond a mere balance of probabilities.  Where residence however long is neutral or colourless or indeterminate in character, it will not give rise to an inference that the domicile of origin has been abandoned.  Secondly, on the other hand, a mere “floating intention” (to adopt the language of Story) to return to the country of origin at some future period is not sufficient for the retention of the domicile of origin if the propositus has settled in some other territory subject to a distinct system of law with the intention of remaining there for an indefinite time.”
60.	It is common ground on the facts that the domicile of origin of both appellants was Indian.  Although Paramjit Singh Gill was born in England, Sewa Singh Gill was born in India and both their parents were domiciled in India.  There was scope for debate as to whether they had acquired a domicile of choice in the United Kingdom.  However, it is important to appreciate how the question of domicile came to be relevant at the trial.
61.	As already indicated, the prosecution case was that over the years the appellants had each systematically failed to declare accounts held at various financial institutions, both in the United Kingdom and offshore.  The motive behind that conduct was said to be to evade paying tax due on income generated by their business Club Tropicana.  It was the prosecution case that the monies held in those accounts were the undeclared profits of the business and thus liable to tax. 
62.	One of the appellants’ defences was that monies held offshore in accounts in the name of one or both of the appellants, or held jointly with family members, were not theirs but the profits of the Indian farm owned by their mother which never came into the United Kingdom.  The accounts were funded by the “Hawala” system, which was a means by which monies were brought out of India in such a way as to circumvent the Indian exchange control regulations.
63.	The Revenue challenged that case on three bases: first, that the farm profits could not account for all the monies held offshore; secondly, that the appellants were in any event heavily involved in running the farm; and thirdly, that the “Hawala” system involved monies being brought to the appellants’ home in the United Kingdom before being banked offshore.  
64.	On any of those bases, the domicile of the appellants would be irrelevant.  The defence first raised the issue of domicile on 9 January 2002 when the report of Alan Polling was served on the appellants’ behalf.  Mr Polling is or was a solicitor employed by a firm of chartered accountants as a tax consultant.  The Revenue subsequently called three witnesses as to domicile and the defence called Mr Polling.  It is not entirely clear to us on what basis this evidence was admissible, but it was called by both sides, so far as we are aware, without objection.  
65.	It is stated in the Revenue’s skeleton argument on this issue that the witnesses were in broad agreement and there was no suggestion at the hearing of the appeal that that was not the case.  The agreed position may be summarised in this way:	
i)	The only significance of an individual who is resident being treated as not being domiciled here is that he is not liable to United Kingdom tax on overseas income unless that income is brought onshore.  A non-domiciled resident in the United Kingdom is liable to United Kingdom tax on income earned here and on income earned offshore but brought here, even if it is subsequently sent back offshore.
ii)	By section 65(4) of the Income and Corporation Taxes Act 1988, as it applied in the relevant years, an individual wishing to avail himself of treatment as not being domiciled here must “satisfy the Board that he is not domiciled in the United Kingdom”.  He does so “on a claim to the Board”.  Such a claim should be made within six years of the year to which the claim relates, unless the Revenue, in assessing the individual, is itself looking further back.
iii)	A competent accountant would have advised both appellants that the Revenue would be likely to accept a claim by them to be treated as not being domiciled in the United Kingdom.  The key question was whether the appellants intended to remain permanently in the United Kingdom.
66.	We note in regard to that last point that in the course of the appeal Mr Sapsford showed us a letter dated 14 July 2003 from the Revenue’ Centre for Non-Residents, Residence, Advice and Liabilities, to the appellants’ solicitors stating that on the basis of the information given to them they were prepared to treat the appellants as not domiciled in the United Kingdom for the tax year ended April 2003.  That seems consistent with point iii) above.
67.	The Revenue’s submissions may be summarised as follows:
i)	Each of the appellants accepted in cross-examination that they made no claim to be treated as non-domiciled in the United Kingdom, either during the relevant years or subsequently, despite being represented by accountants.
ii)	Each of the appellants also accepted in cross-examination that at no time during either the Hansard interviews or the interviews under caution did they contend that, as non-domiciled residents, they would not be liable to pay tax on monies generated offshore which remained offshore.
iii)	The jury could properly infer that the reason the appellants did not claim to be domiciled outside the United Kingdom was that so to assert would not achieve any legitimate tax advantage because the monies were not offshore funds at all but were the undeclared profits of the Club Tropicana or because it was not their intention to return to India in due course.
iv)	Each of the appellants accepted in cross-examination that what they said was “Hawala” system money did arrive at their address in the form of cash or cheques before being sent back offshore.
v)	The jury were entitled to conclude that, even if some of the monies came from India, since the monies arrived onshore and the appellants were involved in the farm and the money movement, they were in any event liable to United Kingdom tax.
vi)	It follows that the domicile defence depended upon the jury’s finding of the facts.  It could only bite if the jury were to conclude that the monies held offshore had been generated offshore and never came onshore.
vii)	The judge dealt adequately with the domicile issue in the summing up.
68.	We have considered the materials to which we were referred and are satisfied that each of submissions i) to vi) is correct and that the judge adequately explained the position to the jury.  It seems to us that in these circumstances it is very unlikely indeed that the jury ever came to consider the question whether the appellants were in fact domiciled in the United Kingdom or in India at the relevant time.  After all, they themselves said in evidence that “Hawala” money came into the United Kingdom before being sent offshore.  It is only in respect of any monies which were earned offshore and remained offshore that the question of actual domicile was relevant.  Otherwise the issue centred round the state of mind of the appellants for the reasons set out in the Revenue’s submissions.
69.	To the extent that the issue of actual domicile was live, the judge directed the jury in accordance with the evidence of Mr Polling, who was called on behalf of the defence, and whose evidence (as indicated above) was not in this respect in issue between the parties.  In the course of his summing up on this issue the judge said (at pp 22-3):
“Domicile.  It is an unusual word.  I must say something about it, members of the jury, but the issue is quite simple and, in the end, it will depend on what view you take of the evidence.  But, as explained to you by the expert Mr Polling, everybody has a domicile and the defendants had the domicile of their birth because they were the sons of Naranjan and therefore they have an Indian domicile, but then of course were resident in this country.  What Mr Polling told you is that in the light of the information that he was given, to the effect that both Sewa and Bob, who are fluent Punjabi speakers, have an intention to return to India on a permanent basis, if that is true, then the consequences are, and the prosecution and defence both agree this, and it was in truth the intention of each defendant to return to live in India permanently, then they are non-domiciled for the purposes of United Kingdom tax.  So you do not have to decide whether Mr Polling’s conclusions are correct or incorrect.  They are in law correct.  The issue is whether it is actually true that the defendants have and always have had a clear and settled intention to return permanently to India.
In the course of Mr Abell’s cross-examination of the defendants, neither defendant was expressly and actually challenged about their evidence that they intended permanently to return to India; but the Crown say, you may think, members of the jury, as a matter of reality, they did not and neither of them did in truth have a clear intention of returning to India to live there permanently (1) because they never claimed to be non-domiciled in their dealings with the Revenue in this case, nor was it ever raised in the detailed questions from Mr Tulloch in 1997.
The defence say that you should be persuaded on the evidence that despite the fact that the defendants never made a formal claim to be treated as non-domicile, they were in reality claiming to be non-domicile as long ago as 1984 when there was a letter written by Mr Mounteer to Sewa Gill on the subject and I will remind you of that letter in the course of my review of their evidence.”
70.	The judge then explained the relevance of the domicile question as we have done above.  Later in his summing up he referred expressly to the letter written by Mr Mounteer and to the detailed evidence of the appellants, both in chief and in cross-examination.  In that part of his summing up he correctly identified the various questions which the jury had to consider as to the appellants’ state of mind at different stages of the case.
71.	We do not think that the judge’s explanation of the legal position, based as it was on the statement of principle set out in Mr Polling’s evidence and accepted by both sides at the trial, was incorrect.  In the light of the principle set out, for example, by Simon P in Henderson v Henderson (quoted above), it was a sufficient statement of the relevant question for the purposes of this case to ask whether each defendant intended to return to live in India permanently.  If it had not been, counsel for the defence would no doubt have pointed it out to the judge.  It was then for the jury to decide what evidence to accept and what to reject.
72.	The judge gave the jury a standard and adequate direction as to the burden of proof and we detect no error in this respect, either as to domicile or, indeed, as to any other aspect of the case.  We certainly do not think that the convictions are arguably unsafe by reason of any defect in the summing up under this head.  It follows that we take the view that the single judge was right to refuse leave to appeal on this ground and we refuse this renewed application.
Cheating the Revenue
73.	In this ground it is alleged that the judge misdirected the jury in respect of the legal concept of cheat.  The judge said this in the course of his summing up at p 9:
The offence of cheating the public revenue does not necessarily require a false representation by words or conduct.  The meaning of cheat in this indictment, members of the jury, can include any form of fraudulent conduct which has the result of diverting money from the Revenue and depriving the Revenue of money to which it is entitled.  It has of course to be fraudulent conduct; that it to say, deliberate conduct by the defendant whose case you are considering …. to prejudice or to take the risk of prejudicing the Revenue’s right to the tax in question, knowing that he has no right to do so.
The Crown do not have to prove that tax was actually evaded, providing that there was deliberate conduct with intent to defraud [and] that there was a risk of tax being evaded”.
74.	The single judge took the view that it was not arguable that the judge misdirected the jury in this regard.  We agree.
Directions on the Issues
75.	The final proposed ground of appeal is that the judge failed to give the jury clear directions as to the issues they had to decide on each count on the indictment.  Again, the single judge considered this ground, which involves looking at each count, and concluded that it was not arguable.  We agree.  The judge considered each count in some detail and, in our judgment, the jury can have been in no doubt as to what they had to decide in each case.  The appellants’ submission in this regard, if correct, would involve unnecessary and undesirable over-analysis of the facts.
CONCLUSION
76.	For the reasons we have given we dismiss the appeal on the ground in respect of which leave was given, namely that relating to the Hansard interview.  We refuse the renewed application on the other grounds, including the suggested ground based on non-disclosure.  In our judgment these convictions were safe.  We would add that, in our view, Mr Sapsford was right to concentrate in his oral submissions on the Hansard and domicile issues.