Sharp rise in HMRC’s use of financial institution notices

HMRC asked banks and other financial institutions for information about 647 taxpayers as part of investigations in the year to 31 March 2023 according to an HMRC report. This was up from 355 in the first nine months of its new powers to access information from banks.

HMRC gained greater powers to demand information on taxpayers from banks in 2021 with the introduction of financial institution notices (FINs). The creation of the power was intended to increase the speed at which HMRC could respond to data requests from foreign countries about UK taxpayers. However the report shows that 80% of FINs filed last year originated with HMRC itself rather than overseas tax authorities. This proportion increased from 60% in the previous year (2021-22).

Steven Porter partner at Pinsent Masons said: ‘HMRC is now a data-driven organisation and bank account information is one...