HMRC Asking For Information They Are Not Entitled To See

What can HMRC ask to see? Is a FAQ and the answer is not a simple one; under FA 2008, Sch 36, para 1 the HMRC officer can as for anything that is ‘reasonable required’ for the investigation. Now your idea of what is ‘reasonable’ will be different from what HMRC thinks is ‘reasonable’.

Generally – for example – HMRC can’t ‘reasonably’ ask to see personal bank statements unless they’ve found something wrong with the business records. This is to prevent HMRC going on what’s known as ‘fishing expeditions’ – which is where they don’t have much to go on but will ‘fish’ until they catch something, even if it takes years.

A handful of readers have emailed me to say that HMRC have been asking for a full range of documents in the opening letter of the investigation. This includes personal statements appointment books or diaries and records from outside the year being investigated. HMRC have no right to ask this information and you should not hand it over.

Dealing with this is very simple. If you feel that what HMRC is asking for is unreasonable you simply write back saying ‘Why is xxxxx ‘reasonably required’ for your tax enquiry’. You might also want to draw their attention to FA 2008, Sch 36.

If they persist, consider appealing to the  Tax Tribunal – be sure you’ve got your facts right first.

But I’ve got nothing to hide! You might be saying. Well that’s how it starts; HMRC say that they are just ‘checking’ your records and that nothing is necessary wrong. But the fact is that the HMRC investigator who is dealing with you needs to get ‘heads on sticks’ to be promoted. Nobody wants to stay on the bottom-rung of the ladder for the whole of their careerer. To move up they need to get results; and you are that result.

More on FA 2008, Sch 36 powers to requests by Keith M Gordon here.