An investigation into suspected tax evasion targeted four former partners at Belfast accountancy firm KPMG in a publicity stunt, the High Court heard on Wednesday

HM Revenue and Customs misled judges into granting warrants to search the executives’ homes and offices in a move that wrecked their careers at the company, it was alleged.

The claims were made as Eamonn Donaghy, Jon D'Arcy, Paul Hollway and Arthur O'Brien won permission to challenge the legality of the permits.

They were all arrested last November, but have not been charged with any wrongdoing.

At the time KPMG said it was cooperating with the investigation and had placed the men on “administrative leave”.

In February this year the company announced that the partners in its Belfast office subject to the HMRC probe had retired.

Inquiry

KPMG stressed the inquiry related solely to the executives’ personal affairs and was unrelated to the company’s business or its clients.

Mr Donaghy, Mr D’Arcy, Mr Hollway and Mr O’Brien are now seeking to judicially review the lawfulness of the warrants issued to search their homes and business premises.

Their lawyers argue that significant information about their co-operation was omitted in applications for permission to trawl through the houses and offices.

Barry Macdonald QC said: “HMRC obtained these warrants in circumstances where they misrepresented the relevant facts.

“They effectively concealed the existence of relevant correspondence and misled the judges into believing that (the four men) had failed to provide all the relevant information.”

HMRC had previously written to thank the executives for their comprehensive answers to enquiries, the court heard.

They knew nothing more until searches were launched at their homes and business offices more than a year later, according to their case.

Mr Macdonald set out details of a statement of complaint relied on by HMRC in its applications for the warrants.

It claimed: “This case provides an opportunity to arrest and prosecute four high-profile individuals who are involved in a substantial attack on the revenue system.”

Counsel for the four men alleged the tax authorities saw the case as an opportunity to attract beneficial attention.

“These applications for search warrants, both of the houses and of the office, was actuated by an improper, collateral purpose,” he contended.

“This was essentially a publicity stunt rather than a valid, genuine application for warrants to obtain documentation.”

Mr Macdonald also claimed the move against his clients had a major impact on their professional lives.

“By virtue of the conduct of HMRC they had not only wrecked the careers of these applicants in KPMG, but jeopardised their livelihoods into the future,” he added.

Delay

Tony McGleenan QC, for the tax authority, raised issues over the delay in bringing proceedings over the office search warrant.

However, a panel of three senior judges granted leave to seek a judicial review after identifying reasons to extend time and a public interest in the case.

A full hearing will now take place in October.

Outside court the four former partners' solicitor, Paul Pierce of KRW Law, stressed they had all fully co-operated with the civil inquiry into their tax affairs.

“In August 2014 HMRC indicated they had received all of the relevant information and that they would be in touch with my clients,” Mr Pierce said.

“The next thing they were aware of was when HMRC, assisted by the PSNI, raided their houses and business premises.”

Mr Pierce added: “The searches at my clients’ homes were not only unnecessary, but were carried out in a very heavy-handed, disproportionate and aggressive manner.”