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The exception from information powers is withdrawn by paragraphs 26 and 27 for certain information or papers of an auditor who has acted as a tax accountant for a client.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

 

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