HMRC has a number of civil powers it can use in order to carry out a compliance check.
The powers enable HMRC to:
- Obtain documents and information
- Inspect business premises
In addition, HMRC has data-gathering (or bulk information) powers that enable it to collect data from certain categories of third parties, referred to as data-holders. Broadly speaking, this includes employers and banks, who make payments on which the recipients may be required to pay tax.
The power to obtain documents and information is exercised by issuing an information notice.
There are four types of information notice:
- Taxpayer notices, where HMRC requires a person to provide information or documents so that HMRC can check that person’s tax position
- Third party notices, where HMRC requires a person to provide information or documents so that HMRC can check the tax position of another person – where HMRC knows the identity of that other person
- Identity unknown notices, where HMRC requires a person to provide information or documents for the purposes of checking the tax position of a person, whose identity is not known to HMRC (e.g. obtaining information from banks about customers with offshore accounts)
- Identification notices, where HMRC requires a person to provide another person’s name, address and/or date of birth, in order to check that other person’s tax position.
In some cases the request for information is intrusive, not necessarily required or simply not reasonable, in which case we can help in appealing such notices.