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Going fishing
Key points
- Under TMA 1970 and FA 1998 HMRC has a variety of powers to enforce compliance with UK tax rules.
- Hackmey v HMRC examined the validity of a FA 2008 Sch 36 formal notice issued by HMRC.
- When opening an enquiry HMRC usually issues an informal information request with which the taxpayer has no obligation to comply. HMRC then has the power to issue a formal request under FA 2008 Sch 36.
- In the case of discovery assessments the requirement for information to be ‘reasonably required’ runs parallel with the need for a ‘reason to suspect’.
- HMRC’s investigation tactics have changed and increasingly start off with informal requests for information that slowly turn into formal requests.
- Taxpayers and advisers should stay alert as to the consequences of being unnecessarily helpful in complying with HMRC information requests.
- Taxpayers should consider appealing discovery assessments if the circumstances support it.
An investigation by HMRC...
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