“13 Commissioners to keep accounts (1) The Commissioners shall collect and cause to be collected every part of inland revenue, and all money under their care and management, and shall keep distinct accounts thereof at their chief office.”
“9 Ancillary powers (1) The Commissioners may do anything which they think— (a) necessary or expedient in connection with the exercise of their functions, or (b) incidental or conducive to the exercise of their functions. (2) This section is subject to section 35.”
“(2) In this Act— (a) “function” means any power or duty (including a power or duty that is ancillary to another power or duty)…” (a) “function” means any power or duty (including a power or duty that is ancillary to another power or duty)…”
“1 Responsibility for certain taxes The Commissioners for Her Majesty’s Revenue and Customs shall be responsible for the collection and management of— (a) income tax, (b) corporation tax, and (c) capital gains tax.” (a) income tax, (b) corporation tax, and (c) capital gains tax.”
“(2) Every return under this section shall include a declaration by the person making the return to the effect that the return is to the best of his knowledge correct and complete.” s. 9 (as first introduced in 1996) deals with self-assessment. It provides that a tax return under s. 8 has to include a self-assessment, that is to say an assessment of the amounts in which the person making the return is chargeable to income tax and capital gains tax, and of the amount payable. s. 9A deals with the opening of an enquiry into a tax return by HMRC. So far as relevant it provides as follows: “9A Notice of enquiry (1) An officer of the Board may enquire into a return under section 8 or 8A of this Act if he gives notice of his intention to do so (“notice of enquiry”)– (a) to the person whose return it is (“the taxpayer”), (b) within the time allowed. (2) The time allowed is– (a) if the return was delivered on or before the filing date, up to the end of the period of twelve months after the day on which the return was delivered; (b) if the return was delivered after the filing date, up to and including the quarter day next following the first anniversary of the day on which the return was delivered; (c) if the return is amended under section 9ZA of this Act, up to and including the quarter day next following the first anniversary of the day on which the amendment was made. For this purpose the quarter days are 31st January, 30th April, 31st July and 31st October. (3) A return which has been the subject of one notice of enquiry may not be the subject of another, except one given in consequence of an amendment (or another amendment) of the return under section 9ZA of this Act. (4) An enquiry extends to— (a) anything contained in the return, or required to be contained in the return, including any claim or election included in the return, …”
“28A Completion of enquiry into personal or trustee return (1) This section applies in relation to an enquiry under section 9A(1) of this Act. (1A) Any matter to which the enquiry relates is completed when an officer of Revenue and Customs informs the taxpayer by notice (a “partial closure notice”) that the officer has completed his enquiries into that matter. (1B) The enquiry is completed when an officer of Revenue and Customs informs the taxpayer by notice (a “final closure notice”)— (a) in a case where no partial closure notice has been given, that the officer has completed his enquiries, or (b) in a case where one or more partial closure notices have been given, that the officer has completed his remaining enquiries. (2) A partial or final closure notice must state the officer’s conclusions and– (a) state that in the officer’s opinion no amendment of the return is required, or (b) make the amendments of the return required to give effect to his conclusions. (3) A partial or final closure notice takes effect when it is issued. (4) The taxpayer may apply to the tribunal for a direction requiring an officer of the Board to issue a partial or final closure notice within a specified period. (5) Any such application is to be subject to the relevant provisions of Part 5 of this Act (see, in particular, section 48(2)(b)). (6) The tribunal shall give the direction applied for unless satisfied that there are reasonable grounds for not issuing the partial or final closure notice within a specified period. (7) In this section “the taxpayer” means the person to whom notice of enquiry was given. (8) In the Taxes Acts, references to a closure notice under this section are to a partial or final closure notice under this section.”
“29 Assessment where loss of tax discovered. (1) If an officer of the Board or the Board discover, as regards any person (the taxpayer) and a year of assessment— (a) that any income, unauthorised payments undersection 208 of the Finance Act 2004 or surchargeable unauthorised payments under section 209 of that Act or relevant lump sum death benefit under section 217(2) of that Act which ought to have been assessed to income tax, or chargeable gains which ought to have been assessed to capital gains tax have not been assessed, or (b) that an assessment to tax is or has become insufficient, or (c) that any relief which has been given is or has become excessive, the officer or, as the case may be, the Board may, subject to subsections (2) and (3) below, make an assessment in the amount, or the further amount, which ought in his or their opinion to be charged in order to make good to the Crown the loss of tax. … (3) Where the taxpayer has made and delivered a return under section 8 or 8A of this Act in respect of the relevant year of assessment, he shall not be assessed under subsection (1) above— (a) in respect of the year of assessment mentioned in that subsection; and (b) in the same capacity as that in which he made and delivered the return, unless one of the two conditions mentioned below is fulfilled. (a) that any income, unauthorised payments undersection 208 of the Finance Act 2004 or surchargeable unauthorised payments under section 209 of that Act or relevant lump sum death benefit under section 217(2) of that Act which ought to have been assessed to income tax, or chargeable gains which ought to have been assessed to capital gains tax have not been assessed, or (b) that an assessment to tax is or has become insufficient, or (c) that any relief which has been given is or has become excessive, the officer or, as the case may be, the Board may, subject to subsections (2) and (3) below, make an assessment in the amount, or the further amount, which ought in his or their opinion to be charged in order to make good to the Crown the loss of tax. (a) in respect of the year of assessment mentioned in that subsection; and (b) in the same capacity as that in which he made and delivered the return, unless one of the two conditions mentioned below is fulfilled. (4) The first condition is that the situation mentioned in subsection (1) above was brought about carelessly or deliberately by the taxpayer or a person acting on his behalf. (5) The second condition is that at the time when an officer of the Board— (a) ceased to be entitled to give notice of his intention to enquire into the taxpayer’s return under section 8 or 8A of this Act in respect of the relevant year of assessment; or (b) in a case where a notice of enquiry into the return was given— (i) issued a partial closure notice as regards a matter to which the situation mentioned in subsection (1) above relates, or (ii) if no such partial closure notice was issued, issued a final closure notice, the officer could not have been reasonably expected, on the basis of the information made available to him before that time, to be aware of the situation mentioned in subsection (1) above.”
“In this Schedule– “checking” includes carrying out an investigation or enquiry of any kind.” “checking” includes carrying out an investigation or enquiry of any kind.”
“(6) Condition B is that, as regards the person, an officer of Revenue and Customs has reason to suspect that– (a) an amount that ought to have been assessed to relevant tax for the chargeable period may not have been assessed, (b) an assessment to relevant tax for the chargeable period may be or have become insufficient, or (c) relief from relevant tax given for the chargeable period may be or have become excessive.”
“There is a venerable principle of tax law to the general effect that there is a public interest in taxpayers paying the correct amount of tax, and it is one of the duties of the commissioners in exercise of their statutory functions to have regard to that public interest.”
“The authorities deal with widely different statutory functions but establish the general proposition that when a power is claimed to be incidental, the provisions of the statute which confer and limit functions must be considered and construed. The question is not whether swap transactions are incidental to borrowing but whether swap transactions are incidental to a local authority’s borrowing function having regard to the provisions and limitations of the Act of 1972 regulating that function. The authorities also show that a power is not incidental merely because it is convenient or desirable or profitable.”
“To use the statutory power in the way suggested by the claimants would be inconsistent with the statutory scheme.”
“You should normally ask for information you need at every stage of the enquiry before you consider the use of information powers… Normally you should not issue a notice under FA08/Sch36/Para1 unless the taxpayer has refused to co-operate with an informal request for information…”
“as this promotes co-operation, collaboration and often progresses a tax investigation expeditiously.”
“The investigation will cover your current business interests but will also cover other businesses which you are or have been connected with and any dealings with companies that may have an effect on your personal tax liability. It will include all sources of income and gains giving rise to any taxes, both direct and indirect. These taxes include Income Tax, VAT, Corporation Tax and Capital Gains Tax.”
“My investigation is being conducted with the aim of achieving a civil financial settlement of any unpaid tax together with any interest and penalties arising. The penalty is a percentage of the tax unpaid, understated or underassessed. The level of penalty percentage applied will depend upon your behaviour, which led to any errors or omissions, and the extent to which you help us arrive at the correct liability. Full cooperation will ensure that any penalties are reduced to their minimum levels and you may be able to avoid having your details published.”
“HMRC welcomes your cooperation with our investigation and in establishing your correct liabilities. The extent to which you cooperate with us and provide us with information is entirely a matter for you.”
“As stated in my letter8 June 2016 [sic – in fact 9 June], my investigation will cover all of Mr Robertson’s business interests and will include all sources of income and gains giving rise to any taxes. One of the items I would want to discuss at the proposed meeting is the£3.3m gain made by Mr Robertson during the 2014/2015 tax year following the sale of goodwill in JJ Management Consulting LLP to Boisson Consultants Limited. I would be grateful if documentation in relation to this gain was provided at, or prior to the meeting, including details of how the goodwill was valued.”
“As I have previously highlighted to Mr Makkonnen [of Bark & Co], my main concerns relate to Mr Robertson’s ability to fund his lifestyle based on his declared income and issues arising from the sale of the goodwill of JJ Management Consulting LLP to Boisson Consultants Ltd.”
“As I stated on the telephone on6 April 2017 , I have not opened Section 9A enquiries into Mr Robertson’s tax returns. I have information to suggest that Mr Robertson’s tax returns are incorrect and, under Section 29, TMA 1970, I could consider raising assessments to charge tax that may be due. I met with Mr Robertson and his advisors on3 November 2016 to discuss his tax affairs and I subsequently made informal requests for information and documentation. Most of this information and documentation was requested in my letter dated21 November 2016 and remains outstanding. I believe this information and documentation is reasonably required for the purpose [of] checking Mr Robertson’s tax position as I suspect that an amount that ought to have been assessed to tax may not have been assessed. If the information and documentation is not provided I will have to consider making a formal request to Mr Robertson (FA 2008, Sch36, para 1 / para 21 (6)).”
“HMRC is entitled to carry out a check of an individual’s tax position outside the time limit for opening a S9A TMA 1970 enquiry. When HMRC has ceased to be able to enquire into a tax return under S9A TMA 1970, the legal basis that allows an Officer to ask for information to check a person or entity’s tax position is schedule 36 FA 2008.”
“To that end, HMRC officers can request further information to quantify a taxpayer’s liability without immediate recourse to legislative powers, which does of course depend on co-operation by the person concerned…. HMRC reserves its rights to use schedule 36 FA 2008 powers to obtain any information that might be required to check the tax position, and to make assessments under S29 TMA 1970 to make good any loss of tax.”
“Enquiries after time limit for notice of enquiry has elapsed It is not possible for HMRC to commence enquiries under the Section 9A powers once the time limit for giving a notice of enquiry has passed. Any enquiries commenced outside these time limits may only be made for the purposes of a discovery assessment under Section 29 (see SALF409 onwards). HMRC may sometimes refer to such cases as ‘investigations’, in order to distinguish them from enquiries pursued under the S9A powers. In such cases HMRC have to rely on the information powers in FA08/Sch36 to support the investigation. Discovery assessments are limited to where a loss of tax has been brought about carelessly or deliberately by the taxpayer or a person acting on his behalf, or there has been a failure to disclose all the relevant information.”
“382. HMRC’s request for private bank statements was not made under Schedule 36 to the FA 2008 nor within the remit of an enquiry under section 9A of the TMA 1970 . However, it was made pursuant to HMRC’s general responsibility for the collection and management of revenue.”
“385. HMRC submitted that Officer Booth’s compliance check and request for private bank statements were made by virtue of these legislative provisions which afford HMRC responsibility for the collection of taxes. They submit that Officer Booth was not acting ultra vires even though he was not acting pursuant to section 9A of the TMA 1970 nor Schedule 36 of the FA 2008. 386. As set out above, the Tribunal is of the view that HMRC are empowered to make requests for voluntary cooperation from taxpayers even if not using statutory powers to obtain material under compulsion. Section 1 TMA 1970 and section 5 CRCA simply explain the extent of HMRC’s powers and responsibilities, they do not address the question specifically. 387. Ultimately, for the reasons set out above, it is not within the Tribunal’s jurisdiction to determine the lawfulness of non-statutory enquiries or investigations.”
“Few rights would be of any practical value in the absence of a reasonable opportunity to seek court assistance to enforce them when threatened or violated. The right of access to court merely spells out what is already implied by the very existence of a right: the availability of a mechanism for enforcing the right.”
“In a similar way, it seems to me that, to give a follower notice, HMRC must be of the opinion that the principles or reasoning in the ruling in question would deny the advantage, not merely that they would be more likely than not to do so. That implies, I think, a substantial degree of confidence in the outcome.”
“What does fairness require in the present case? My Lords, I think it unnecessary to refer by name or to quote from, any of the often-cited authorities in which the courts have explained what is essentially an intuitive judgment. They are far too well known. From them, I derive that (1) where an Act of Parliament confers an administrative power there is a presumption that it will be exercised in a manner which is fair in all the circumstances. (2) The standards of fairness are not immutable. They may change with the passage of time, both in the general and in their application to decisions of a particular type. (3) The principles of fairness are not to be applied by rote identically in every situation. What fairness demands is dependent on the context of the decision, and this is to be taken into account in all its aspects. (4) An essential feature of the context is the statute which creates the discretion, as regards both its language and the shape of the legal and administrative system within which the decision is taken. (5) Fairness will very often require that a person who may be adversely affected by the decision will have an opportunity to make representations on his own behalf either before the decision is taken with a view to producing a favourable result; or after it is taken, with a view to procuring its modification; or both. (6) Since the person affected usually cannot make worthwhile representations without knowing what factors may weigh against his interests fairness will very often require that he is informed of the gist of the case which he has to answer.”
“the information purportedly received by HMRC in 2014 and the ‘further information’ purportedly received subsequently as being the foundation for its decision to commence and continue an investigation” and: “the material passed to CTU that was said to justify (against the ‘normal’ criteria for investigation) the commencement of an investigation into the Claimants.”
“Parliament could have provided for the First-tier Tribunal to have power to make suspensory orders pending the outcome of an appeal, but it did not do so. I do not think that it is open to the court to provide remedies or procedures for which the statute does not provide—particularly so when, as I have pointed out above, care was obviously taken to specify precisely what the tribunal could and could not do.”
“Council Directive 2011/116/EU of15 February 2011 on administrative cooperation in the field of taxation and repealing Directive 77/799/EC Double Taxation treaty - Article 26 of the UK/Spain Double Taxation Convention.”
“I confirm that our country is able to provide similar information”
“I confirm that our country is unable, for legal reasons, to provide similar information.” (4) Box A1-6, headed “Exhaustiveness” contained one box only, which HMRC ticked, namely: “I confirm that I have exhausted the usual sources of information which I could have used in the circumstances to obtain the information requested, without running the risk of jeopardising the outcome of the enquiry.” (5) Box B3-5 was headed “General case description and tax purposes for which the information is sought”
“In no case shall the provisions of paragraphs 1 and 2 be construed so as to impose on a Contracting State the obligation… (b) to supply information which is not obtainable under the laws or in the normal course of administration of that or of the other Contracting State…”
“Member States should exchange information concerning particular cases where requested by another Member State and should make the necessary enquiries to obtain such information. The standard of ‘foreseeable relevance’ is intended to provide for exchange of information in tax matters to the widest possible extent and, at the same time, to clarify that Member States are not at liberty to engage in ‘fishing expeditions’ or to request information that is unlikely to be relevant to the tax affairs of a given taxpayer. While Article 20 of this Directive contains procedural requirements, those provisions need to be interpreted liberally in order not to frustrate the effective exchange of information.” 116.Art 1.1 provides as follows: “1. This Directive lays down the rules and procedures under which the Member States shall co-operate with each other with a view to exchanging information that is foreseeably relevant to the administration and enforcement of the domestic laws of the member States concerning the taxes referred to in Article 2.”
“any information referred to in Article 1(1) that it has in its possession or that it obtains as a result of administrative enquiries.” 118.Art 17.1 provides as follows: “1. A requested authority in one Member State shall provide a requesting authority in another Member State with the information referred to in Article 5 providing that the requesting authority has exhausted the usual sources of information which it could have used in the circumstances for obtaining the information requested, without running the risk of jeopardising the achievement of its objectives.”
“In no case shall the provisions of paragraph (1) be construed so as to impose on one of the Contracting States the obligation:… (b) To supply particulars which are not obtainable under the laws or in the normal course of administration of that or of the other Contracting State…”