Can HMRC Look At My Personal Records?

To look at your personal records HMRC have to either ‘break’ your business records (make a ‘discovery’ that something was wrong) or show that your personal finances are inconsistent with the business records, so you couldn’t live the way you live on the income you declare.

But increasingly HMRC are asking for personal records right at the start of the investigation.

Mark Morton, head of tax at Mercia, said, ‘I’m increasingly coming across requests for private bank account details in opening letters and in early meetings HMRC have focused purely on the private affairs, have ‘interrogated’ the taxpayer and demanded private accounts.’’

Anne Eager, Tax Director at Robert James Partnership, confirmed the new approach: ‘’I’ve had requests for bank records for my clients in opening letters, when I challenged the request the Inspector said that it was to save time as he felt it was very likely there were issues with the records and added this was a ‘standard approach’ under the new regime.’’

This new hard-nosed approach contravenes Article 8 of the Human Rights Act, which sets out the right to privacy.

Chris Chadburn, director of tax specialists at Venntax said: ‘’I go to a football match with a five friends, I put all the tickets on my credit card. My friends give me cash, which I use to pay the card. HMRC can look at that cash entering my account and say it is undeclared earnings. That’s just one of the dangers of allowing your personal records to be seen. Inspectors can be overzealous and when that happens we have to remind them that they need to ‘break’ the business records before they can look at personal statements. If they insist we can take the issue to a Tribunal.’