‘1 (1) An officer of Revenue and Customs may by notice in writing require a person (“the taxpayer”) – (a) to provide information, or (b) to provide a document, if the information or document is reasonably required by the officer for the purpose of checking the taxpayer’s tax position.’ (2) Where an information notice to a taxpayer after a tax return has been submitted, para 21, which has as its heading, ‘Taxpayer notices following tax return’, provides for certain conditions to be met before a taxpayer notice can be issued, of which Conditions A and B are directly relevant to this appeal. ‘21 (4) Condition A is that a notice of enquiry has been given in respect of – (a) the return, or (b) a claim or election […], and the enquiry has not been completed so far as relating to the matters to which the taxpayer notice relates.’ ‘21 (6) Condition B is, 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.’ (3) The legislation governing appeals against information notices is provided under Part 5 of Sch 36, of which para 29 states: ‘29 (1) Where a taxpayer is given a taxpayer notice, the taxpayer may appeal to the tribunal against the notice or any requirement in the notice. (2) Sub-paragraph (1) does not apply to a requirement in a taxpayer notice to provide any information or produce any document, that forms part of the taxpayer’s statutory records. …’ (4) The Tribunal’s jurisdiction on an appeal against an information notice is provided under para 32, of which sub-para 32(3) states: ‘32 (3) On an appeal that is notified to the tribunal, the tribunal may – (d) confirm the information notice or a requirement in the information notice, (e) vary the information notice or such a requirement, or (f) set aside the information notice or such a requirement. (5) The Tribunal’s decision on an appeal against an information notice does not carry further right of appeal, and is final, as expressly set out under sub-para 32(5): ‘32 (5) Notwithstanding the provisions of sections 11 and 13 of theTribunals, Courts and Enforcement Act 2007 a decision of the tribunal on an appeal under this Part of this Schedule is final.’
‘It is our view that HMRC is not entitled to this information.’ (2) On11 October 2021 , Officer Campbell wrote to the agent and the appellant to advise that a check of the tax return is not restricted to the entries made on the return but also on what has not been included in the return. As to the items of information requested, they are ‘reasonably required in order to get a full picture of [the appellant’s] sources of income to ensure the return is complete and correct’
‘[Bamel Patel] is a FTT case and is irrelevant to this enquiry. The information requested in that case is completely different to the information you are requesting in this case. We are not contesting the request in this enquiry based on linkage … We act for the company and Professor Leen and confirm that he did not receive any remuneration, dividends, or benefits from the company in the tax year ended5th April 2018 . It is our opinion that you have all information that you reasonably require.’
‘The documents in relation to the company are relevant to this enquiry as your client has stated that the income received for consultancy work was paid to the company and included on the Corporation Tax return; we require sight of the requested documentation to confirm this. In addition to this, your client has significant financial control of the company and we need to be satisfied that all monies received from the company have been correctly reported on your client’s Self-Assessment Tax Return.’
‘This notice and schedule applies to all documents in your possession or power, other than documents or information that fall within paragraph 19 of Schedule 36Finance Act 2008 or is privileged. Information that we need […] You advised that all the credits made to the TSB account plus the AXA income credited to the Nationwide account were reported through GRI Research Laboratories Ltd, the sum of which – according to your figures - was£693,607 for 2017-18. Having reviewed the accounts of that company to the31 January 2018 I can see that the reported turnover for the company was£358,642 . Please explain the reason for the apparent discrepancy. Those accounts show the liabilities and shareholders’ funds to (both) be£123,293 . Please advise: 1. How the amount shown as shareholder’s funds came about. 2. The reason for the reduction in this amount from£165,260 at31 January 2017 to£123,293 at31 January 2018 (it would appear that no dividends/salary are being paid out from this company). 3. How much of those shareholders’ funds related to Mr Leen? 4. Have any dividends or salaries been paid from this company? If so, please provide details. 5. Will you please provide an analysis of the director's loan account for the period to31 January 2018 to include the opening and closing balances, the date, amount and description of each individual transaction posted to that account.’
‘I consider that there are sufficient grounds to show that HMRC had reason to suspect that the tax return you submitted for the tax year 2017-18 may be inaccurate when considering all the information known to them at the time the notice was issued, and that their suspicion is still valid.’
‘The purpose of the statutory scheme is to assist HMRC at the investigatory stage to obtain documents and information without providing an opportunity for those involved in potentially fraudulent or otherwise unlawful arrangements to delay or frustrate the investigation by lengthy or complex adversarial proceedings or otherwise.’
‘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.’
‘This analysis is also consistent with the objective of Sch 36 taken as a whole’, which is “to ensure that the information which will ensure that the correct amount of tax can be determined”, see HMRC v Tager[2015] UKUT 0040 (TCC) at [16] per Judge Bishopp.’
‘… the question for the FTT in relation to the information and documents sought by a third party notice is also expressly limited: the FTT must be satisfied that in all the circumstances, the officer giving the notice is justified in concluding that the information or documents are reasonably required for checking the tax position of the taxpayer. Again, that does not require any examination of the nature and extent of the underlying tax investigation, but rather a focus on whether there is a rational connection between the information and documents sought and the underlying investigation.’
‘Notwithstanding the provisions of sections 11 and 13 of theTribunals, Courts and Enforcement Act 2007 a decision of the tribunal on an appeal under this Part of this Schedule is final.’
‘This means that the normal rights of appeal from a decision of the FTT to the Upper Tribunal, and from the Upper Tribunal to this court, are excluded. The inference which I draw from this unusual provision is that Parliament did not wish the collection of information by HMRC from taxpayers to be unduly delayed. Adequate protection for the taxpayer, at this early stage, is provided either by the prior approval of the tribunal to the giving of the notice, or (if such approval is not sought by HMRC under paragraph 3) by the single right of appeal under paragraph 29.’
‘Those accounts show the liabilities and shareholders’ funds to (both) be£123,293 ’ does not make sense. The liabilities (i.e.‘amounts falling due within one year’) stand at£6,419 in the accounts, which is notidentical to the balance for ‘shareholders’ funds’