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HMRC’s use of Schedule 36 FA 2008 Information Notices is on the increase

10 September 18 | By: Jas Jhooty

It has come to our attention that HMRC compliance officers have started to routinely utilise draconian information powers encapsulated in Schedule 36 Finance Act 2008. These information powers were originally designed to only be used in the most serious cases of suspected fraud and have been around for 9 years. The legislation requires that that information or documentation requested by a HMRC officer must be “reasonably required” for checking the taxpayer’s “tax position”. The requested information must be submitted to HMRC within a 30 day time frame or else the business will face the prospect of a fixed penalty of £300 and ongoing daily penalties of up to £60 for failure to comply. These penalties typically run into £1,000s. The subjective nature of this requirement means that the business under review and the HMRC officer may have differing views of whether a document meets the test.

Most businesses will immediately comply with HMRC’s request for information using the rationale that they have nothing to hide, or assuming that HMRC are entitled to the information and not wishing to upset their relationship with HMRC.

However, none of the above are valid reasons for giving HMRC documents or information that they are not entitled to. The HMRC officer is not necessarily entitled to everything they are asking for. If you are not sure that the HMRC officer is entitled to a document, you should ask why the item is required. HMRC should not be using its information powers to make speculative enquiries, and the officer should be able to justify their request.
If you are on the receiving end of such an information notice, we advise you to obtain professional advice immediately. Our consultants have appealed against the majority of the Schedule 36 FA 2008 Information Notices received by our clients and have had them set aside having successfully argued on the grounds that they had not been issued appropriately.

If want to find out what steps you should be taking now to safeguard your business from a HMRC enquiry you will be interested to learn that we are hosting a seminar in central Manchester at 10:00 am this Friday 14th September 2018 on “How to keep safe from HMRC”.

To find out more and to book your tickets please click this link.


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