HMRC regularly obtain information and documentation from a number of sources. More recently this is under the Common Reporting Standard (CRS). But HMRC’s thirst for more and more can lead to HMRC issuing Notices to provide documentation under Schedule 36 Finance Act 2008. The worst thing that can happen is the documentation is now destroyed. This can lead to a fine or worst still, imprisonment.
What is a Notice?
A Notice is more than just a letter although it may be received as page 2 of a letter. It will stand out in as much it will typically be the wording within text boxes surrounded by a single black line.
The same request can be made for a number of different tax years. Each request being made under a separate Notice.
Readers of the letter may not initially register the formalities of the legislation being used or the significance of the timescales and potential penalties that can be imposed for non-compliance of each Notice.
Do I have to comply?
Yes, so far as you are able to. If you don’t, you can be penalised.
If the documentation or information is no longer available because it was thrown away or destroyed, you may need to seek a duplicate from the original source. The covering letter will state that it is an offence to destroy any documentation once the Notice has been issued.
Similarly, if you conceal it from HMRC, you can be penalised.
Why are such Notices issued?
Within certain parameters, HMRC can seek documentation and information that is reasonably required in order to determine a taxpayer’s liability.
A Notice can be issued directly to a taxpayer or anybody acting on behalf of a taxpayer. Accountants, trustees, bankers or any other third party can be issued with Notices on a named or group of taxpayer. Although the legislation is different, the outcome is the same.
Is HMRC being aggressive?
No. Whilst this may seem to be the case, HMRC are undertaking more and more projects into groups of taxpayers rather than separate investigations into individual taxpayers. It is often more effective for HMRC to use their formal powers sooner rather than later as this can delay matters overall for everyone.
What is the worst thing that can happen?
Depending on the facts, you could face imprisonment.
Should I seek help?
Yes, from a specialist that is experienced in handling such requests. Notices to provide documentation There are risks of over complying as well as under complying that you need to be aware of.
In my experience, a Notice can be composed by more than one official. There is always the possibility that one part of the Notice contradicts with another part of the Notice written by another official.