Authorisation

Some of the information and inspection powers can only be exercised with the agreement of an “authorised officer”. The FA 2008, Sch. 36, para 59 defines an authorised officer as an officer or member of a class of officers authorised by the Commissioners of HRMC for the purpose of the provision that specifies the need for the agreement of an authorised officer.

For these purposes the Commissioners have authorised officers who have had practical experience in the use of the information and inspection powers.

They have a duty to stand back from the case and give careful consideration to whether the proposed action is reasonable and proportionate and whether the views of the taxpayer or third party have been taken into account.

The agreement of an authorised officer is required for the following:-

  • An application for approval of the Tribunal for a written notice or an inspection.
  • A notice requiring the production of documents more than 6 years old.
  • In addition, only an authorised officer can issue an identity unknown notice.

For expert representation and advice for your HMRC tax investigation call KinsellaTax NOW on 0800 471 4546

 

Auditors

Under the provisions of the FA 2008, Sch. 36, para. 24, an auditor who carries out a statutory audit (for example under the Companies Act and the Building Societies Act) cannot normally be required to:-

  • Provide information held in connection with the audit or
  • Provide their audit papers.

Para. 24 only applies to the information and papers arising out of a statutory audit.

However, HMRC have instructed their officers that they should not require production of information or papers from an auditor appointed to carry out an independent non-statutory audit provided that:-

  • The audit is carried out to a standard similar to that required by the Companies Act or laid down by the client’s professional body and
  • The audit work is kept separate from the accounts preparation work.

The exemption from the information and inspection powers only applies to audit papers that are in the hands of the auditor. If they are in the hands of anyone else they are within the powers.

The exception from information powers is withdrawn by paragraphs 26 and 27 for certain information or papers of an auditor who has acted as a tax accountant for a client.

An information notice can be issued for any information or documents that haven’t already been provided to HMRC that explains entries in the client’s accounts, tax return and other information or documents given to HMRC if the auditor helped to prepare them or submitted them.

This exception from the protection from the information powers is limited and an officer can request information to show how an entry was arrived at, not why.

As in the case of privileged documents, if only part of the document is protected from the information powers by para. 24, compliance with a notice can be made by way of providing a copy of the non-protected part(s) or a copy of the whole document with the protected part(s) blacked out.

The whole of the original document must be produced, however, if required, with the protected parts covered up.

Call KinsellaTax NOW on 0800 471 4546 for expert advice and representation for your HMRC tax investigation

 

Journalistic Material

FA 2008, Sch. 38, para. 19 (1) (b) prevents HMRC from requiring the production of journalistic material as defined by the Police and Criminal Evidence Act 1984 Section 13 (PACE) or information contained in journalistic material.

The definition of journalistic material in the PACE 1984 is material acquired or created for the purpose of journalism. If, therefore, a journalist researches or publishes a story on tax evasion by a particular company, HMRC will not be able to require production of the journalist’s material to assist them with an enquiry into that company’s tax affairs.

To forward in the restriction in para. 19 (1) (b) the journalistic material must be either:-

  • In the power or possession of the journalist or
  • Unsolicited material sent to the journalist to be used for journalism.

Contact KinsellaTax to speak to a specialised tax adviser on 0800 471 4546

 

Legal Privilege

Communication between professional legal advisers and clients that are privileged, are protected by FA 2008, Sch. 36, para. 23.

HMRC cannot issue an information notice to require the production of:-

  • Privileged information or
  • Any part of a document that is privileged.

Information and documents are privileged if a claim to legal professional privilege or (in Scotland) to confidentiality of communications as between client and professional legal adviser could be maintained in legal proceedings.

A document will generally be covered by legal professional privileges if it is a confidential communication between the lawyer and the client which provides the client with legal advice or is for the purpose of litigation, either actual or contemplated.

If only part of the document is privileged, compliance with the notice can be way of providing a copy of the non-privileged part or a copy of the whole document with the privileged parts blacked out.

The whole of the original document must be produced, however, if required, with the privileged parts covered up.

Any dispute as to whether or not legal professional privilege applies to information or a document is to be decided by the Tribunal.

Call 0800 471 4546 for professional advice and representation for your HMRC tax investigation.

 

Old Documents

FA 2000, Sch. 36, para. 20 prevents HMRC from requiring the production of a document the whole of which originated more than 6 years before the date of the notice unless the information notice is issued by, or with the agreement of, an authorised officer.

To be within the provision, the whole of the document must have originated more than 6 years before the date of the notice. If some entries in the document, for example in a record book, were made more than 6 years before and some within the proceeding 6 years the officer can require the whole document to be produced without seeking the agreement of an authorised officer.

The authorised officer might issue an information notice or agree to it being issued for a document that originated more than 6 years before the date of the notice if:-

  • There are reasonable grounds for suspecting a deliberate error in a year that is still within the 20 year time limit for assessment purposes.
  • The document is required to check the Capital Gains Tax position on the disposal of an asset acquired several years ago.

There will be no failure to produce a document required by an information notice if the document is more than 6 years old and the notice was issued without the agreement of an authorised officer.

Call 0800 471 4546 NOW for professional advice and representation for your tax investigation.

 

Pending Appeal

If a document relates to a pending appeal (FA 2008, Sch. 36, para. 19 (1) (a)) it prevents HRMC from requiring its production.

This restriction applies only to documents brought into existence as part of the preparation for conducting a pending appeal. It does not cover documents that were already in existence before the appeal process began.

For expert advice and representation for your HMRC tax investigation call KinsellaTax today on 0800 471 4546. Don’t delay.

 

Personal Records

HMRC cannot require the production of personal records or of the information contained in them.

FA 2008, Sch.36, para. 19 (2) which provides this restriction on HMRC information and inspection powers states that personal records are as defined in the Police and Criminal Evidence Act 1984 s. 12.

Section 12 defines personal records as records concerning any individual’s physical, mental, spiritual or personal welfare.

Because, for example, a medical practitioner’s records might mix a patient’s personal notes containing diagnosis and treatment with billing details for diagnosing and treating them.

Para.19 (3) allows HMRC to require a person to produce personal records that omit the information that makes them personal records so that just the information that is not personal information is produced.

Before they are allowed to ask for personal records, officers must consult with their Head Office Unit, Central Policy, Tax Administration and Advice.

They will want to be sure that the proposed action is proportionate and the only effective way of carrying out the check. Officers are instructed that they must never use the information for any purpose other than to investigate the tax affairs of the professional concerned.

Patient information gathered in this way must not be used to check the tax position of the patients.

HMRC take the view that appointments diaries and the like, which simply name the patients, are not personal records.

Contact KinsellaTax to speak to a specialised tax adviser on 0800 471 4546

 

Possession or Power

The FA 2008, Sch. 36, part 4 says there are various restrictions on HMRC’s information and inspection powers.

It states that an information notice can only require a person to produce a document if it is in their possession or power.

A document would be in a person’s power if it was in the possession of a third party but the person could direct or influence the third party to produce it.

If a taxpayer does not produce a document the onus will be on them to show there was no failure because the document was neither in their possession nor in their power. This can happen in cases of partners where it can be shown that some partners have a restricted right of access to documents under the partnership agreement.

Even if a document is in a person’s possession or power there are further restrictions on what HMRC can require to inspect. These cover the following:-

  • Appellant material
  • Journalistic material
  • Personal records
  • Old documents
  • Legally privileged information and documents
  • Audit papers
  • Tax advisors’ papers giving advice.

Call KinsellaTax TODAY on 0800 471 4546 for expert advice

 

Tax Advisers

The information powers can not normally be used to require a tax adviser:-

  • To provide information about “relevant communication” or
  • To produce documents that belong to the tax adviser and consists of relevant communications.

Relevant communications are defined by FA 2008, Sch. 36, para. 25 (3) as communications between a tax adviser and:-

  • A person in relation to whose tax affairs he has been appointed or
  • Any other tax adviser of such a person.

The purpose of which is the giving or obtaining of advice about those tax affairs. They include letters, emails, faxes, notes of telephone conversations or notes of meetings.

The exemption from the information powers is withdrawn by para. 26 and 27 for certain relevant communication where a tax adviser has acted as a tax accountant for a client. An information notice can be issued for any information or documents that haven’t already been provided by HMRC that explains entries in the client’s accounts, tax return or other information or documents given to HMRC if the tax adviser helped prepare them or submitted them.

This exemption from the protection from the information powers is limited. An officer can request information only to show how an entry was arrived at, not why.

As with privileged and audit documents, if only part of the document is protected from the information powers by para. 25, compliance with the notice can be made by way of a copy of the non-protected parts or a copy of the whole document with the protected parts blacked out. The whole of the original document must be produced, however, if required, with the protected parts covered up.

Contact KinsellaTax on 0800 471 4546 TODAY

More Information

Translate »