Under the provisions of FA 2008, Sch. 36, para. 5 an authorised officer can issue an information notice requiring a person to provide information or produce documents reasonably required to check the UK tax position of:-
- A person whose identity the officer does not know or
- A class of persons whose individual identities are not known.
‘UK tax’ excludes ‘relevant foreign tax’.
These notices are known as identity unknown notices.
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Appeal Rights and Procedure
The provisions dealing with the right to appeal can be found in FA 2008, Sch. 36, para. 29-31.
The person receiving an information notice can appeal against the notice or against a requirement in it.
As well as a failure to follow the rules specifically relating to a particular type of notice, the grounds for appeal can include a failure to either:-
- Take account of the restrictions that apply to all notices
- Comply with the general rules that apply to all notices.
Where the appeal is against the notice, the person does not have to comply with it until the appeal has been heard. But where the appeal is against a requirement in the notice, the person must comply with the other requirements.
If the notice has been issued with the approval of the Tribunal the only way to challenge it is by way of judicial review.
An appeal must:-
- Be made in writing and addressed to the officer who issued the notice
- Reach HMRC within 30 days of the date on which the information notice was given
- State the grounds of appeal.
If it is not settled by agreement between the appellant and HMRC it will be heard by the Tribunal, which can:-
- Confirm the notice or a requirement in it
- Vary the notice or such a requirement
- Set aside the notice or such a requirement.
The Tribunal’s decision is final – there is no further right of appeal.
If the Tribunal confirms or varies the notice, the person must comply within the period set by the Tribunal. If the Tribunal does not set a period, the person must comply within the period set by the officer.
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The only ground for appeal is that complying with the notice would be unreasonably burdensome. It would be unreasonably burdensome if the requirement were not reasonable and proportionate for the purpose of checking the person’s tax position, taking into account the value of the information in that context.
There is no right to appeal against a notice requiring:-
- A parent undertaking to provide information or produce documents that form part of the statutory records of the parent or any of its subsidiaries to check the tax position of one or more subsidiaries.
- A partner to provide information or produce documents to check the tax position of one or more of the other partners, in their capacity as such.
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An authorised officer must have the approval of the Tribunal before issuing an identity unknown notice unless the notice is issued to either:-
- A parent undertaking to check the tax position of one or more subsidiary undertakings
- The notice is given to a partner for the purpose of checking the tax position of one or more other partners.
The conditions that have to be met before the Tribunal can give its approval for an identity unknown notice are set out in FA 2008, Sch. 36, para. 5 (4) and are as follows:-
- The identity of the person or the individual identities of a class of persons are not known to the officer
- There are reasonable grounds for believing that those persons have failed, or may have failed to comply with a tax provision
- Failure to comply with the tax provision is likely to have led, or to lead to, serious prejudice to the assessment or collection of UK tax
- The information or document cannot be readily obtained from anywhere else.
HMRC would consider that there was a serious prejudice to the collection or assessment of tax if there was a risk of:-
- Tipping off a person suspected of committing a serious civil offence
- The loss of significant amounts of tax.
Where the Tribunal gives approval, the notice must say so.