HMRC Information Powers – Schedule 36 FA 2008

HMRC has broad powers to issue information notices under Schedule 36 of the Finance Act 2008, enabling them to request documents and data to verify a person’s tax position. These notices are a critical part of HMRC’s compliance and enforcement strategy, and they can be directed at individuals, third parties, or even where the taxpayer’s identity is unknown.

Understanding the types of notices, your rights and obligations, and the potential consequences of non-compliance is essential for managing risk and ensuring timely, accurate responses. This guide outlines the key features of HMRC information notices, the limitations on what can be requested, and the steps clients should take to protect their interests.

Whether you’ve received a notice or are preparing for possible HMRC scrutiny, early engagement and informed action are vital. Let’s explore what these notices mean and how best to respond.

Types of Notices  HMRC may issue three types of information notices:

1. Taxpayer Notice – issued directly to the taxpayer.
2. Third Party Notice – issued to a third party about another person.
3. Identity Unknown Notice – issued to a third party where the taxpayer is unidentified.

Each notice must be in writing and may request documents or information reasonably required to check the tax position. “Tax position” includes past, present, and future liabilities to UK tax and certain foreign taxes.

Key Points for Clients

• Timing & Response: HMRC typically allows 30 days to respond, but longer periods may apply. Early review is essential — late objections are unlikely to be accepted.
• Format: HMRC may specify how information is provided, including electronic formats. They may access computer systems to retrieve data.
• Scope: Notices may require existing documents or the creation of new ones (e.g. summaries or explanations).
• Limitations: HMRC cannot request:
  • Legally privileged material
  • Auditor working papers
  • Tax advice held by advisers
  • Documents over six years old (unless authorised)
  • Sensitive records (e.g. medical, journalistic, appeal-related)

Appeals & Tribunal Approval

• Appeals may be made against taxpayer and third party notices unless:
  • The notice concerns statutory records
  • The notice has Tribunal approval
• Tribunal-approved notices may be issued without informing the taxpayer if HMRC believes disclosure would prejudice tax collection. Judicial review may be the only remedy in such cases.

Penalties for Non-Compliance

• £300 initial penalty
• Up to £60 per day for continued failure
• Tax-geared penalties for deliberate underpayment
• Criminal sanctions for concealment or destruction of documents

International Cooperation

HMRC’s powers are being extended to support foreign tax authorities under treaty arrangements, reflecting increased global cooperation.

Recommended Actions

• Review any HMRC notice promptly and seek advice early.
• Ensure statutory records are complete and accessible.
• Maintain well-organised digital records to facilitate compliance.
• Consider legal privilege and confidentiality before disclosure.

If you receive a Schedule 36 notice or anticipate HMRC scrutiny, please contact us immediately for tailored advice and support. Early engagement is key to managing risk and ensuring compliance.