What are HMRC’s data powers?
HM Revenue & Customs (HMRC) can issue a Notice in order to gather information and documentation relating to the past, present and future tax position of any taxpayer or group of taxpayers.
This applies both to UK tax and tax of an EU Member State or of a country with whom the UK has a tax information exchange agreement.
What types of information notice are there?
HMRC can issue three types of information notice:
- a notice served on the taxpayer to check their tax position
- a notice served on a third party to check another’s tax position
- a notice served on a third party in respect of a person or persons whose identity is unknown
Do I have to comply?
Yes – otherwise penalties can be levied. Up to £300 per Notice for an initial penalty and up to £60 a day per Notice for any continuing failure to comply.
Can I appeal?
Whilst there is a right of appeal against first and third party notices, no appeal is available if the documents requested are part of the taxpayer’s statutory records or if the giving of the notice was approved by the First-tier Tribunal. Statutory records include those required under the Taxes Acts.
What do I have to provide?
The Notice only requires the production of a document if it is within the person’s power or possession.
If specified information is requested it may require the recipient of the notice to create new documentation such as schedules, lists or summaries together with explanations.
HMRC can specify whether the information is to be supplied electronically or in paper format.
How much time do I have to comply?
In each case the notice must be given in writing and may require information or documents “reasonably required” for the purposes of checking the tax position of the relevant person. The recipient must be given a reasonable time to respond and comply. Although no statutory lower limit is prescribed in law, HMRC will normally allow at least 30 calendar days.
If you wish to discuss this or any other matter with a member of the team, please contact us.