The Government invites views from businesses, individuals and advisers on the effectiveness of HMRC’s current powers and proposed amendments.
On 10 July 2018, HMRC published a consultation on amending their civil information powers. The objective of the consultation is to consider the relevance of HMRC’s civil powers given the amount of information that is now held electronically, and certain targeted changes, mostly relating to third party notices relating to a known taxpayer. The consultation is open until 2 October 2018.
The proposed options for changes set out in the consultation include:
The removal of the requirement for tribunal or taxpayer approval to be sought in particular represents a significant increase to HMRC’s civil information powers, since it would effectively remove the requirement for HMRC to demonstrate that the information requested is reasonably required, which a tribunal would have expected HMRC to demonstrate. Further, allowing HMRC to request information directly from banks has the potential to affect a taxpayer’s relationship with their bank which might make inferences as to why information has been requested. Alternative safeguards, such as requiring HMRC to either use first party powers initially or to seek tribunal approval for domestic cases for example, may be effective in ensuring a balance between providing HMRC with the powers they need and protecting taxpayers from unreasonable requests, however these would need to be carefully considered.
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