Post-Finance Act 2008


The statutory record keeping requirement contained in Finance Act 2008, Sch. 37 is supported by the information powers included in Finance Act 2008, Sch. 36. These apply to all taxes administered by HMRC, including VAT, and permit HMRC to check a taxpayer’s records at any time (as has always been the case for VAT). There is no appeal against HMRC’s request to inspect a person’s records but the request would have to be reasonable. As an example of what would not be considered reasonable HMRC instance repeated requests to see the same records.


The new information powers give HMRC the right to see the statutory records that the taxpayer is required to keep and permit them to request any other records that they consider necessary to check the taxpayer’s tax position. Information other than the statutory records is referred to as ‘supplementary information’. The power to request supplementary information will allow an officer to request:-


    • Information, explanations and schedules, including business diaries, appointment books, private bank account statements, etc.;


    • Information that is not written such as photographs of an asset;


    • Something that has to be created or brought into being (so the power would not be restricted to existing documents).





The power to require the provision of supplementary information has to be used reasonably and there is a right of appeal against it.


HMRC have also obtained a new information power that enables them to demand information from accountants and tax advisers to explain any information or document they assisted the client in preparing for submission to HMRC. While HMRC have for some time been able to demand to see the ‘link papers’ (the workings showing how figures derived from various sources related to the figures on a return), this new power goes further. It is not linked to an entry in a tax return and can be used to demand information or documents that are reasonably required for the purpose of checking a person’s tax position. It can be used, therefore, to require accountants and tax advisers to provide explanations for their advice to their clients.


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