There are restrictions that apply to all information notices. In addition to these restrictions and rules that apply to all information notices, there are specific rules that apply to each type of notice.
Under FA 2008, Sch. 36, para. 1 a written notice can be sent to the taxpayer requiring them to:-
- Provide information or
- Produce a document
If the information or document is reasonably required for the purpose of checking the taxpayer’s tax position.
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Para. 3 (4) permits the Tribunal to disapply conditions (c) and (d) if they are satisfied that telling the taxpayer that the information or documents are required and giving them a reasonable opportunity to make representations would prejudice the assessment or collection of tax.
HMRC have indicated that they would consider it would prejudice the assessment or collection of tax where they believe there is a risk of:-
- Collusion with or intimidation of a third party
- The person’s flight or disappearance
- The alienation of assets
- Destruction of evidence
The taxpayer can appeal against the notice or any requirement in it. There is no right of appeal however against:-
- A requirement to provide information or produce a document that forms part of the taxpayer’s statutory records.
- A notice issued with the approval of the Tribunal.
- A notice requiring only information or documents that form part of the taxpayer’s statutory records and relate to:-
- The supply of goods or services
- Acquisitions of goods from another member state
- Importation of goods from outside the member states in the course of carrying on a business
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Self-Assessment Return Made
FA 2008, Sch. 36, para. 21 provides that if a person has made a self-assessment tax return in respect of a chargeable period, a taxpayer notice cannot be issued for checking their income tax or capital gains tax position (or corporation tax position for a company) for that chargeable period unless any of the following apply:-
- A notice of enquiry has been issued in respect of that return and the enquiry is still open
- HMRC have reason to suspect that tax has been underpaid and an assessment or determination could still be made – a discovery position
- The person’s VAT position is being checked
- The person’s position with regards to deductions or repayments under PAYE or the Construction Industry Scheme is being checked.
These restrictions do not apply, however, if there has been a charge of ownership of a company and liability has arisen or might arise under ICTA 1988 S 767A or 767AA (FA 2008, Sch.36, para.37).
If a partnership return has been made, the restrictions in Para. 21 (see above) apply as if the return had been made by each of the partners in respect of the chargeable period. (FA 2008, Sch. 36, para. 36).
An open enquiry into a return of an individual partner does not prevent HMRC from issuing a notice to the partnership for the same chargeable period.
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Tax Payer Approval
Approval for issuing a taxpayer notice:
- Is not normally required before the officer carrying out the check can issue a taxpayer notice
- Can be sought from the Tribunal by or with the agreement of an authorised officer.
The conditions that have to be met before the Tribunal can give its approval for a taxpayer notice are set out in FA 2008, Sch. 36, para. 3 and are as follows:-
- The application is made by or with the agreement of an authorised officer
- The Tribunal is satisfied that, in such circumstances, the officer is justified in issuing the notice
- The person to whom the notice is addressed has been told that the information or documents referred to in the notice are required and given a reasonable opportunity to make representations to the officer (unless this condition is disapplied by the Tribunal)
- The Tribunal has been given a summary of any representations made by the person.