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Information requests: what can HMRC ask for?

John Cassidy, Partner, Tax Resolutions
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During enquiries of any nature it is common for HMRC to ask for documents and information. Such requests are usually made under powers in Schedule 36 FA 2008 which, whilst widely drawn, also includes restrictions and safeguards for the taxpayer. Despite this, it is not uncommon for HMRC to demand data that is outside the scope of its powers, for example data relating to transactions undertaken in tax years other than the year under self-assessment enquiry or data that has nothing to do with the tax return in question such as how capital assets were funded many years previously.  

We have recently seen several examples of HMRC taking this a step further by asking for information under the Data Protection Act (DPA). Such requests can be very wide including demands for agents to supply any documentation and information provided to/from [the named client] regarding the services requested/provided to him.

The DPA does of course restrict what disclosures of personal data advisors can make but there are certain exemptions relating to tax, for example if the disclosure is concerned with the assessment or collection of any tax or duty or any imposition of a similar nature, which is how HMRC justifies the DPA request.

Of crucial importance, however, is that the DPA exemptions merely permit the disclosure of data, they do not compel such disclosure, unlike valid notices under Schedule 36 FA 2008. This is not made clear in the HMRC letters we have seen but advisors ought to be aware of this critical point before potentially spending a lot of time to, in effect, volunteer copious amounts of confidential data to HMRC.    

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How Crowe can help

The legislation surrounding data requests from HMRC, whether in an apparently straightforward self-assessment enquiry, a discovery situation or a more serious fraud investigation is a minefield. Please contact one of the experts in our multi-award winning tax resolutions team if you or your clients need assistance in this respect.      

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John Cassidy
John Cassidy
Partner, Tax Resolutions