TAX investigators will arrest suspected fraudsters, take fingerprints, bail suspects and search people and premises without police assistance under wideranging new powers being sought by HM Revenue & Customs.

Accountants said yesterday that they feared that the “potentially draconian powers”, which could be introduced as soon as next year, would drive a wedge between the business community and the taxman.

Mike Warburton, tax partner at Grant Thornton, described the proposed police-style powers as “frightening”. He said: “Customs have always had greater powers because their ethos was that they were trying to catch villains. Now that Revenue and Customs are under one banner, I fear that this is the direction that the taxman is headed as well.”

Plans to increase dramatically the powers of tax investigators, bringing them into line with Customs officers, are part of the tough new stance of HM Revenue & Customs (HMRC) on tax evasion, which recently included a crackdown on British citizens with offshore bank accounts.

Clive Gawthorpe, of the UHY Hacker Young accountancy firm, said: “They’re trying to tighten up on everything and it’s creating an ‘us and them’ situation.”

A recent aggressive ploy by the Revenue was to demand that Barclays divulge details of customers with offshore accounts. Other banks are expected to be forced to follow suit after claims by the Revenue that £1.5 billion in unpaid income tax is hidden in tax havens.

Gordon Brown announced in March 2004 that the Inland Revenue and Customs & Exise would merge, raising speculation that the Chancellor was unhappy that the taxman’s softly, softly approach was contributing too little to Britain’s coffers.

A new Revenue consultation document, Modernising Powers, Deterrents and Safeguards, suggests that tax investigators be able to make arrests and searches and take fingerprints, rather than asking police to do so. The new rules would apply only to criminal tax investigations, and not civil cases.

Investigators’ powers could be extended under the existing Police and Criminal Evidence Act 1984, which means that new legislation would not be required in England, Wales and Northern Ireland to introduce the new powers. The Act does not apply in Scotland, but the Revenue has suggested that similar provisions appropriate to the Scottish legal system be developed.

Consultation will end in November. A second consultation will take place, probably in the first half of next year. HMRC has not set an implementation date. However, it is the Revenue that will decide the extent to which it will boost its own powers.

A Revenue spokesman said: “Existing powers for investigating suspected tax crime can be cumbersome and require duplication of effort. Modernising these provisions would give trained officers harmonised powers.”