HMRC’s information powers are developing due to continued pressure to increase tax yield, combined with additional demands for data from its international counterparts. Whilst there has been little change in the primary legislation recently, practice has changed significantly with the interpretation of such powers being explored in case law. It has traditionally been understood that HMRC’s Sch 36 powers were only applicable within the UK, but this was called into question in Jimenez and also by HMRC’s 2018 consultation on extending its powers. It would also appear that HMRC’s approach to drafting Sch 36 notices has altered: Sch 36 requests appear to be issued at a much earlier stage in enquiries than previously; and the requests themselves appear to be more broadly drafted. Recent cases have tested both the restrictions on Sch 36 requests for professional papers, and HMRC’s (apparently shifting) interpretation of the definition of ‘power or possession’.
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HMRC’s information powers are developing due to continued pressure to increase tax yield, combined with additional demands for data from its international counterparts. Whilst there has been little change in the primary legislation recently, practice has changed significantly with the interpretation of such powers being explored in case law. It has traditionally been understood that HMRC’s Sch 36 powers were only applicable within the UK, but this was called into question in Jimenez and also by HMRC’s 2018 consultation on extending its powers. It would also appear that HMRC’s approach to drafting Sch 36 notices has altered: Sch 36 requests appear to be issued at a much earlier stage in enquiries than previously; and the requests themselves appear to be more broadly drafted. Recent cases have tested both the restrictions on Sch 36 requests for professional papers, and HMRC’s (apparently shifting) interpretation of the definition of ‘power or possession’.
If you or your firm subscribes to Taxjournal.com, please click the login box below:
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