HMRC information notices - are they validly issued?
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HMRC information notices – are they validly issued?
HMRC information notices – are they validly issued?
Mon 15 Jan 2018
Sch 36 FA 2008 provides HMRC with the power to issue Notices requiring a taxpayer or third party to provide documents or information and they are used in many tax enquiries. The rules regarding what can and cannot be sought under these Notices are complex and, amongst other things, require that the Notices are worded carefully and explicitly to make it absolutely clear what is being sought. The Tax Tribunal has confirmed that HMRC needs to prepare the notices properly.
Recent experience of the Mazars Tax Investigations team is that the many of these Notices are so poorly phrased as to make them, or at least some portion of them, legally invalid. Failure to comply with a Notice can result in the imposition of penalties (which can amount to as much as £60 per day or £1,800 per month for as long as the failure continues) so it is important to ensure that, if a Notice is invalid in anyway, we submit an appeal against the Notice within 30 days of its issue. The rules are complex but, as an example, a Notice can be invalid if it so much as includes the term ‘etc’ (in that it can be said to lack the required degree of specification). Additionally, we have seen examples of HMRC being confused as to the circumstances where a ‘first party’ (taxpayer) Notice is appropriate as opposed to a ‘third party’ Notice. This can be very important as it can affect what can be sought, the rights of appeal and also commercial relationships.
If you have any doubts regarding the validity of a Sch36 Notice, please don’t hesitate to contact a member of the Mazars Tax Investigations team.
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