Banks

As a first step, HMRC will always request bank account details from the taxpayer. If the taxpayer fails to comply, the officer will issue a formal taxpayer notice requiring their provision. Although HMRC will not accept the offer of a bank mandate as a way of avoiding personal compliance with the notice, they will consider it if they think it is the best way to get the required information. They may themselves suggest that the taxpayer provides them with mandates if they think that this is the best way to proceed.

If documents relating to an account operated by a spouse or partner are required, the officer will consider issuing a third party notice to the spouse or partner before considering the issue of a third party notice to the bank.

Only if this fails to produce the information will a third party notice be issued to a bank. The taxpayer will be advised that the bank will make a charged for providing the information and that this charge will be the responsibility of the taxpayer. This has not yet been tested in law. In view of the cost involved, the onus will be on the officer to show that the request is reasonable and proportionate.

It would not normally be reasonable for the officer to request the bank’s correspondence files and information on credit-worthiness, nor documents that can only be provided after expensive and time consuming work, such as paid cheques. The types of documents that may be requested as a matter of course are:-

  • Bank account statements
  • Deposit receipts
  • Standing orders
  • Securities, valuables, etc. held for the customer
  • Details of accounts at other branches or banks
  • Credit cards
  • Safe deposits
  • Purchase and sale of shares and securities
  • Insurance transactions

 

HMRC accept that none of this information will be provided by banks without a formal third party notice.

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