Dr Robin Garai v The Commissioners for HMRC [2026] UKFTT 920 (TC)

[2026] UKFTT 00920 (TC)Case No TC 09924
FIRST-TIER TRIBUNAL
TAX CHAMBER
Hearing Heard on: 18 May 2026Date Judgment date: 18 June 2026
By remote video hearing
Appeal reference: TC/2023/07797
INFORMATION NOTICE – Schedule 36 to the Finance Act 2008 – Whether information and documents reasonably required to check tax position – No open enquiry – Whether documents in possession or power – Information notice upheld but varied
Before
TRIBUNAL JUDGE RACHEL GAUKE
Between
DR ROBIN GARAIAppellantTHE COMMISSIONERS FOR HIS MAJESTY’S REVENUE AND CUSTOMSRespondentIn person for AppellantSteve Dent, litigator of HM Revenue and Customs’ Solicitor’s Office for RespondentsDECISION

Introduction

[1]Dr Garai appeals against an information notice (the “Notice”) issued by HMRC under Schedule 36 to the Finance Act 2008 (“FA 2008”) on 15 December 2022. Dr Garai disputes all the items in the Notice.[2]I confirm that the Notice was validly issued by HMRC, but I have exercised my power to vary it. The varied Notice is set out as Appendix 2 to this decision.

Hearing and evidence

[3]The hearing was conducted by video link on the tribunal’s Video Hearing Service. Prior notice of the hearing had been published on the gov.uk website, with information about how representatives of the media or members of the public could apply to join the hearing remotely to observe the proceedings. As such, the hearing was held in public.[4]I had a 328-page hearing bundle that included Dr Garai’s grounds of appeal, HMRC’s statement of case, Dr Garai’s tax returns and PAYE real time information (“RTI”) for the tax years 2021-22 and 2022-23, the disputed information notice, correspondence between the parties, Tribunal directions, and relevant legislation and case law. I also had HMRC’s skeleton argument and some additional documentation from Dr Garai that I refer to below where relevant.[5]I had witness statements from Dr Garai and from Jamie McIntyre, an HMRC officer in HMRC’s Counter Avoidance Directorate. These witness statements stood as their evidence in chief. Dr Garai and Officer McIntyre attended the hearing. Both gave oral evidence and were cross-examined. I have relied on their evidence for some of my findings of fact below.

Findings of fact

[6]Dr Garai is a qualified medical doctor. During the relevant period, he undertook locum and temporary medical work arranged through recruitment agencies. In or around October 2021, he was introduced to a company called Canopaye Ltd (“Canopaye”), which acted as an umbrella company for his engagements. He was employed by Canopaye in this capacity until around May 2023.[7]The recruitment agency told Dr Garai that Canopaye were “legitimate” and would take care of any necessary arrangements regarding HMRC. He was not offered the opportunity to negotiate the terms of his pay: in his words it was “take it or leave it”.[8]Dr Garai received payments from Canopaye under PAYE. HMRC’s understanding is that these payments were broadly in line with the National Minimum Wage.[9]HMRC understands that Canopaye offers disguised remuneration tax avoidance schemes to some or all of its employees. Officer McIntyre is responsible for investigating the users of the arrangements offered by Canopaye.[10]HMRC’s understanding is that the arrangements work as follows.(1) The arrangements are marketed to individuals who obtain work with an end user/client via a recruitment agency.(2) The arrangements may be marketed to the individual by the agency, or the individual may sign up directly with Canopaye as an umbrella company.(3) The individual signs a contract with Canopaye, together with a schedule outlining their start date, basic pay and pay frequency.(4) After carrying out work for an end user, the individual tells Canopaye the number of days and hours worked.(5) The individuals are paid an amount in line with the National Minimum Wage. This amount is taxed appropriately under PAYE, and is reported to HMRC under the RTI system.(6) The individual is also paid an additional amount that is referred to as an annuity payment. The annuity payment is not subject to tax or national insurance contributions, and is not reported to HMRC.[11]HMRC identified Dr Garai as an employee of Canopaye and therefore selected him to receive an informal information request. This was sent to him on 16 September 2022.[12]On 15 December 2022, having received no reply to the informal request, HMRC sent Dr Garai a formal information notice under FA 2008, Sch 36: i.e. the Notice. The cover letter to the Notice was signed by the “Early Intervention Team.”[13]The information and documents required by HMRC were set out in a schedule to the Notice. These related to the period from 6 April 2021 (the beginning of the tax year in which Dr Garai began to be employed by Canopaye) to 16 September 2022 (the date of the original informal request for information). The schedule to the Notice, in the form sent to Dr Garai on 15 December 2022, is reproduced at Appendix 1 to this decision.[14]On 17 January 2023, Dr Garai replied by email to say that he had spoken to Canopaye, who had told him that they would deal with the Notice and would send the relevant documents to HMRC. On the same day, Dr Garai signed an HMRC form headed “Compliance checks: temporary authorisation to allow HMRC to deal with your tax adviser”, authorising Canopaye to deal directly with HMRC in relation to the Notice. Dr Garai provided the Tribunal with a copy of this form.[15]On 20 January 2023, a barrister engaged by Canopaye sent HMRC a letter, enclosing Dr Garai’s signed form authorising Canopaye to act on his behalf, and appealing against the Notice.[16]On 25 January 2023, Officer McIntyre sent Dr Garai his “view of the matter” letter, declining to withdraw the Notice and offering an independent review of his decision. This offer was accepted. HMRC’s reviewing officer sent their review conclusion letter on 28 March 2023, upholding the decision to issue the Notice, but varying its terms so that bank statements were only required for the period from 26 October 2021 to 16 September 2022. 26 October 2021 was the date on which HMRC understood Dr Garai to have become employed by Canopaye.[17]On 24 April 2023, Dr Garai appealed the Notice to the Tribunal.[18]Dr Garai has had no further communications with Canopaye since 2023, and has not engaged a tax agent since that time.[19]Neither party made submissions as to whether Dr Garai submitted tax returns in the two tax years in question (2021-22 and 2022-23). However, the hearing bundle includes documents described as “Garai SA tax return 2021/2022” and “Garai SA tax return 2022/2023”, which show entries from Dr Garai’s tax returns for those years as recorded on HMRC’s system. These documents do not show the dates on which the tax returns were submitted.[20]I therefore find, on the balance of probabilities, that Dr Garai submitted tax returns for the years 2021-22 to 2022-23, but I am unable to make a finding as to the dates on which they were submitted to HMRC. This is significant for reasons I explain later in this decision.[21]At some point subsequent to Dr Garai’s employment with Canopaye ceasing, Canopaye went into liquidation. On 22 December 2025, the liquidators reported that there were insufficient asset realisations from the company to enable a distribution to any class of creditor. Therefore, HMRC do not expect to be able to recover any outstanding amounts of tax from Canopaye.

Relevant law

[22]HMRC’s powers to issue an information notice are found in FA 2008, Sch 36. In the case of an information notice issued to a taxpayer in relation to their own tax affairs, the starting point is FA 2008, Sch 36, para 1, which provides: “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 produce a document, if the information or document is reasonably required by the officer for the purpose of checking the taxpayer's tax position or for the purpose of collecting a tax debt of the taxpayer.

(a) to provide information, or (b) to produce a document,

[23]The following legislative definitions apply:
“58.

(a) past, present and future liability to pay any tax…”

[24]HMRC’s powers to issue an information notice are subject to certain restrictions. Those which are relevant to this appeal are as follows: “18. An information notice only requires a person to produce a document if it is in the person's possession or power. […] 21(1) Where a person has made a tax return in respect of a chargeable period under section 8, 8A or 12AA of TMA 1970 (returns for purpose of income tax and capital gains tax), a taxpayer notice may not be given for the purpose of checking that person's income tax position or capital gains tax position in relation to the chargeable period […] (3) Sub-paragraphs (1) and(2) do not apply where, or to the extent that, any of conditions A to D is met. (4) Condition A is that a notice of enquiry has been given in respect of— (a) the return, or (b) a claim or election (or an amendment of a claim or election) made by the person in relation to the chargeable period in respect of the tax (or one of the taxes) to which the return relates (“relevant tax”), and the enquiry has not been completed so far as relating to the matters to which the taxpayer notice relates. (5) In sub-paragraph (4), “notice of enquiry” means a notice under— (a) section 9A or 12AC of, or paragraph 5 of Schedule 1A to, TMA 1970, or (b) paragraph 24 of Schedule 18 to FA 1998. […]” (a) the return, or (b) a claim or election (or an amendment of a claim or election) made by the person in relation to the chargeable period in respect of the tax (or one of the taxes) to which the return relates (“relevant tax”), (a) section 9A or 12AC of, or paragraph 5 of Schedule 1A to, TMA 1970, or (b) paragraph 24 of Schedule 18 to FA 1998.[25]A taxpayer who receives an information notice may appeal against it. The relevant provisions of FA 2008, Sch 36 are set out below: “29 (1) Where a taxpayer is given a taxpayer notice, the taxpayer may appeal against the notice or any requirement in the notice. […] 32 (3) On an appeal that is notified to the tribunal, the tribunal may— (a) confirm the information notice or a requirement in the information notice, (b) vary the information notice or such a requirement, or (c) set aside the information notice or such a requirement. (4) Where the tribunal confirms or varies the information notice or a requirement, the person to whom the information notice was given must comply with the notice or requirement— (a) within such period as is specified by the tribunal, or (b) if the tribunal does not specify a period, within such period as is reasonably specified in writing by an officer of Revenue and Customs following the tribunal's decision. (5) Notwithstanding the provisions of sections 11 and 13 of the Tribunals, Courts and Enforcement Act 2007 a decision of the tribunal on an appeal under this Part of this Schedule is final.

Discussion on the validity of the Notice

[26]Dr Garai challenged the validity of the Notice on the following grounds.(1) The information and documents requested cover a period of nearly 17 months and straddle two tax years. This is objectively an onerous request. Further, the absence of an open enquiry means that there is no “sensible or reasonable possibility of imposing any liability to pay tax” on the taxpayer.(2) The onerous nature of the information request, coupled with the fact that this approach will be replicated across many employees of this company and the employees of other companies, is at odds with the fact that HMRC should be checking the PAYE position with the employer.(3) HMRC have acted outside their statutory powers by using an information notice as a method of instilling fear into taxpayers. This explains the unreasonable and irrational nature of the notice and also renders the entire notice invalid.[27]The legislation does not place an upper limit on the period of time, nor the number of tax years, that can be covered by an information notice. As regards whether the requests are onerous, the practical limits imposed by the legislation are that the information and documents must be reasonably required to check the taxpayer’s tax position, and that the documents must be in the taxpayer’s possession or power. I consider the “reasonably required” test under the heading of “discussion on individual items” below, and the “possession or power” requirement later in this section.

No present ability to impose a tax liability

[28]Dr Garai’s submissions on this topic must be read by recalling that the Notice was issued on 15 December 2022. On this date, the filing deadline for the tax year 2021-22 was still in the future, and the tax year 2022-23 was not yet complete.[29]Dr Garai relies on comments made in R (oao Johnson) v Branigan [2006] EWHC 885 (Admin) (“Johnson v Branigan”), a case concerning provisions in the Taxes Management Act 1970 that preceded FA 2008, Sch 36. In that judgment, the court held at [15] that HMRC’s information powers can only be exercised where there is a “sensible or reasonable possibility” of raising an assessment.[30]Dr Garai submits that the information and documents requested in the Notice could not (at the time of the issue of the Notice) have resulted in the imposition of a liability to tax because this could not have happened until the tax returns were due for delivery and tax had become payable.[31]HMRC’s power to issue an information notice must be exercised for the purpose of checking a person’s tax position. FA 2008, Sch 36, para 64 provides that a person’s tax position includes their “past, present and future” liability to pay tax. By choosing to include the word “future”, it is in my view clear that Parliament intended to empower HMRC to collect information and documents relating to a person’s liability to pay tax, even where that liability has not yet arisen.[32]Johnson v Branigan was not a case considering future tax liabilities. The requirement for there to be a “sensible or reasonable possibility” of raising an assessment must be read in light of the current statutory language in FA 2008, Sch 36, para 64. Dr Garai is effectively submitting that at the time the information notice is issued, there must be a sensible or reasonable possibility that HMRC could make an assessment at that point, and not at a later stage. The inclusion of “future” tax liabilities in the definition of a person’s tax position means that I am unable to accept this submission.

No open enquiry

[33]Dr Garai has also raised the fact that there is (or was, at the time of the issue of the Notice) no open enquiry. HMRC’s response is that there is no requirement for there to be an open enquiry before they can issue an information notice.[34]While it is correct that this is not a requirement in every case, the existence or otherwise of an open enquiry is relevant if, at the time of the issue of the information notice, the taxpayer has submitted a tax return for the tax year in question. If the taxpayer has submitted a tax return, HMRC can only issue a taxpayer notice if one of the conditions in FA 2008, Sch 36, para 21 are met. One of these conditions (Condition A) is that HMRC have opened an enquiry into the tax return.[35]As I stated above, I received no submissions or evidence from either party as to the date on which Dr Garai submitted his tax returns for 2021-22 and 2022-23. The Notice was issued on 15 December 2022. On that date, the tax year 2022-23 had not yet concluded, and the filing deadline for the tax year 2021-22 was still in the future: on 31 January 2023.[36]I note that the appeal letter from Dr Garai’s agent, dated 20 January 2023, states that he was not yet required to file a return for 2021-22, but does not say whether he had in fact done so. The grounds of appeal raise the point about there being no open enquiry only in the context of the submission I have described above: that (at the time of the issue of the Notice) HMRC had no current ability to raise an assessment. The grounds of appeal make no reference to FA 2008, Sch 36, para 21, or the conditions set out in that provision.[37]As I have been unable to determine the dates on which Dr Garai submitted his tax returns, I am also unable to find that the Notice is invalid due to a failure to meet Condition A in FA 2008, Sch 36, para 21. I had no submissions from HMRC on this point. I note that even if Condition A were not met, this might not have been fatal to the validity of the Notice, as it is possible another of the conditions could have been satisfied.[38]I also note that although Dr Garai represented himself at the hearing, his grounds of appeal were prepared by a barrister who is no longer acting in relation to these proceedings. If Dr Garai had submitted his tax return before the date of the issue of the Notice, such that he could rely on FA 2008, Sch 36, para 21, his barrister could have raised this argument in the grounds of appeal, but did not do so.

Seeking information from the employer

[39]In the hearing, Dr Garai expressed his strong view that HMRC should seek the information and documents set out in the Notice not from him, but from Canopaye. He said that he did not know whether he would be able to find the requested information and documents, but that Canopaye should have them. Although Canopaye is in liquidation, HMRC has corresponded with the liquidators and therefore, according to Dr Garai, HMRC should be able to take steps to obtain the information they need from the company.[40]The fact that HMRC might be able to obtain the information and documents through another route does not provide a legal basis for me to find that the Notice is invalid. I am only able to consider whether HMRC have satisfied the requirements to issue the Notice to Dr Garai. The main relevant restriction is that the information and documents must be reasonably required for checking Dr Garai’s tax position.[41]Dr Garai clearly took the view that because Canopaye had acted as his payroll provider, and because he had signed a form authorising HMRC to deal with Canopaye on his behalf, HMRC should deal with Canopaye and not with him. However, this form did not relieve him of his obligation to comply with the Notice. As Canopaye did not provide the information and documents requested, Dr Garai must provide them himself, to the extent that the Notice is confirmed by this decision.[42]The grounds of appeal include the submission that HMRC should be checking the PAYE position with the employer, rather than with numerous employees. The Notice is not invalidated simply because HMRC may be submitting information notices in similar terms to multiple individuals: the question is whether, for each notice, the information and documents are reasonably required to check the tax position of the taxpayer to whom the notice is addressed.[43]The Notice would, on the other hand, be invalidated if the effect of the PAYE legislation were that the tax liabilities being investigated fell solely on the employer and not the employee. This is because a taxpayer notice can only be used to investigate the tax liabilities of the taxpayer to whom it is addressed.[44]However, while the employer is primarily liable for accounting for the taxes to which the PAYE scheme relates, section 13 of the Income Tax (Earnings and Pensions) Act 2003 (“ITEPA 2003”) provides that the person liable for tax on employment income remains the employee. As the Court of Appeal explained in Stephen Hoey v HMRC [2022] EWCA Civ 656 at [54]:
“Section 684(7) [of ITEPA] makes clear that PAYE regulations have effect despite anything in the Income Tax Acts (which includes the TMA). This ensures that PAYE can operate irrespective of anything in the Income Tax Acts. In particular, this means that notwithstanding the obligation to pay tax normally falls on the person who is liable to tax, under the PAYE regulations, the obligation to pay by deducting at source, is placed on the employer, while leaving the employee's liability to tax on employment income under section 13 of ITEPA undisturbed.” [Emphasis added]
[45]And at [64]:
“…Liability to income tax on employment income rests throughout on Mr Hoey (and the Claimants) [i.e. the employees] under the provisions of primary legislation in section 13 of ITEPA…”
[46]Further, HMRC have powers that enable them, in some circumstances, to transfer responsibility to pay employment taxes from the employer to the employee: these include powers in regulations 71 and 82 of the PAYE Regulations 2003, and in section 684(7A)(b) of ITEPA.[47]I am therefore satisfied that HMRC’s purpose in issuing the Notice was to check the tax position of Dr Garai, rather than solely that of Canopaye.

Possession or power

[48]I note, in relation to Dr Garai’s submission that HMRC should be seeking information and documents from Canopaye, rather than from him, that HMRC can only use the Notice to request information and documents that are in Dr Garai’s possession or power.[49]In HMRC v Mattu [2021] UKUT 245 (TCC) (“Mattu”), the Upper Tribunal approved the approach taken in Parissis v HMRC [2011] UKFTT 218 (TC) at [19], where the First-tier Tribunal said that:
“It seems to us that it is HMRC's application for a penalty and it is for them to satisfy us that the documents are in the respondents' possession or power. We bear in mind it is hard to prove a negative. But, we think, although HMRC must raise a prima facie case that the documents are in the respondents' possession or power then it is for the respondents to show that they are not.”
[50]In Mattu, the Upper Tribunal also approved the approach adopted in H A Patel & K Patel (a partnership) v HMRC [2014] UKFTT 167 (TC). In that case, the taxpayers claimed that the documents requested in an information notice were not in their possession or power, but were within the possession of a professional offshore trustee. The First-tier Tribunal concluded that there had not been any serious attempt to obtain documents from the trustee and as a result the taxpayers were unable to show that the documents were not in their possession or power.[51]In relation to the documents requested by the Notice, Dr Garai accepted that he should be able to obtain his own bank statements. However, in relation to payslips, his evidence (which I accepted) was that these were often provided online, but that once he left a particular agency or assignment, he often lost access to his online portal. In the case of his payslips from Canopaye, his evidence (which again I accepted) was that he had not looked to see if these were available. This was because, in Dr Garai’s view, HMRC should be obtaining these documents from Canopaye, and not from him.[52]I am unable to accept that the payslips were not in Dr Garai’s possession or power at the time of the issue of the Notice. He received the Notice in December 2022 and continued to be employed by Canopaye until May 2023, so even if his access to electronic payslips ceased at the end of that employment, there was plenty of time in the interim during which he knew HMRC had requested these payslips, and could have downloaded them. The Notice was clearly addressed to Dr Garai, not Canopaye, and Dr Garai’s belief that Canopaye should be providing these documents to HMRC did not relieve him from his responsibility to comply with the Notice. As Dr Garai conceded at the hearing that he has not yet tried to access these payslips, he has not met the requirement to make a serious attempt to obtain them.[53]As regards the other information and documents required in the Notice, I find that there is a prima facie case that these would be in Dr Garai’s possession or power, and he has not convinced me otherwise. I invited him to study the Notice and let me know if there were any items he would find difficult to obtain, and he said only that they would all be difficult.[54]The requested documents were contracts and agreements he had entered into, and correspondence he had sent or received, and the requested information related to the arrangements he had entered into with Canopaye. Prima facie, these are all documents he would have, or information he would be able to obtain. He said that it was a long time ago and that he cannot now remember how many assignments he had, but he did not explain what efforts he had made to obtain these documents and information, for example from his own bank records and historic email communications. Without any evidence from Dr Garai to demonstrate that he had made a serious attempt to obtain these items, I am unable to find that they were not in his possession or power.

Additional submissions by Dr Garai

[55]As regards the third ground of appeal, Dr Garai presented no evidence to support the assertion that HMRC were using the Notice as a method of instilling fear into taxpayers. As to whether the Notice was irrational and unreasonable, the relevant test is whether the information and documents requested were reasonably required to check Dr Garai’s tax position. I consider this below.[56]During the hearing, Dr Garai said that he wanted to rely on all the arguments raised by the barrister engaged by Canopaye in the letter sent on 20 January 2023, in which the Notice was appealed to HMRC. This letter contains, in the most part, the same grounds of appeal that were notified to the Tribunal. It also cites some additional materials, including an extract from a Parliamentary exchange in relation to the scope of information notices when they were first introduced, and a passage from HMRC’s Manuals at chapter CH21360 relating to HMRC’s obligations under Article 8 of the European Convention on Human Rights. This passage states that:
“Any planned activity that intrudes upon a person’s privacy must be reasonable and proportionate to the underlying need if it is to comply with the conditions of Article 8(2).”
[57]I confirm that I have read this letter carefully, and that nothing in the cited materials changes the decision I have reached on the grounds of appeal notified to the Tribunal. Although neither party made specific submissions on human rights, had I been required to decide the issue I would have concluded that where (as discussed below) an item is reasonably required for the purposes of FA 2008, Sch 36, the request for that item is also proportionate to HMRC’s underlying need to ensure that Dr Garai has paid the correct amount of tax.

Discussion on individual items

[58]In addition to challenging the validity of the Notice in its entirety, Dr Garai separately appealed each document and piece of information requested.[59]In so far as the grounds of appeal against the individual items repeat the grounds of appeal against the entirety of the Notice, my reasons for rejecting them are set out above.[60]In so far as the grounds of appeal against the individual items amount to an argument that the item is not reasonably required to check Dr Garai’s tax position, I have considered each item separately. Where I have decided the item is not reasonably required, I have exercised my power to vary the requested item. The schedule to the Notice, as varied by the Tribunal, is set out as Appendix 2 to this decision.[61]The burden of proof is on HMRC to show that the information and documents requested in the Notice are reasonably required to check Dr Garai’s tax position, for the reasons set out by the Tribunal in Cliftonville Consultancy v HMRC [2018] UKFTT 231 (TC).[62]In Steven Price v HMRC [2011] UKFTT 624 (TC) (“Price”), in the context of an application by the taxpayer for a direction that HMRC issue a closure notice in relation to the enquiry they had opened into his personal tax return, the Tribunal commented, at [10], that:
“…HMRC is entitled to know the full facts related to a person's tax position so that they can make an informed decision whether and what to assess. It is clearly inappropriate and a waste of everybody's time if HMRC are forced to make assessments without knowledge of the full facts. The statutory scheme is that HMRC are entitled to full disclosure of the relevant facts: this is why they have a right to issue (and seek the issue of) information notices seeking documents and information reasonably required for the purpose of checking a tax return (see Schedule 36 of Finance Act 2008).”
[63]While the Tribunal in Price was considering whether to direct the issuing of a closure notice, I accept that this extract provides helpful guidance in the context of information notices.[64]A further helpful statement of the correct way for the Tribunal to approach the requirement for information and documents to be reasonably required to check a taxpayer’s tax position was set out by the Tribunal in One Call Insurance Services Ltd v HMRC [2022] UKFTT 184 (TC) at [70]:
“I consider that HMRC must identify a tax issue to which the information sought relates and I must be satisfied that HMRC's investigation is genuine and legitimate and not in bad faith. Beyond that it is not for me to reach any conclusion regarding the tax issues or issues identified by HMRC; and, in particular, it is not necessary for it to be shown that a liability to tax will arise on conclusion of the investigation as a valid investigation may lead to the conclusion there is no liability.”
[65]In this case, the tax issue identified by HMRC is whether Dr Garai received amounts in relation to his employment by Canopaye that had not been taxed appropriately, or at all. HMRC have made clear that they do not know whether Dr Garai received any such amounts, but they are entitled to investigate the answer to this question. I have considered whether each item was reasonably required to check Dr Garai’s tax position in relation to his employment by Canopaye.[66]I find that a number of the items requested in the Notice were aimed not at checking Dr Garai’s tax position, but at enabling HMRC to build up a more complete picture of the arrangements operated by Canopaye. What HMRC need to know to check Dr Garai’s tax position is, broadly speaking, how much he received and when, what the payments were for and what form they took, and whether tax had been deducted. Questions about, for instance, the identity of other persons involved in the arrangements are no doubt of assistance to HMRC in seeking to identify, and tax, other users and operators of the arrangements, but these do not affect Dr Garai’s tax liability.[67]I have therefore removed, from the Notice, items that required Dr Garai to identify the person or persons who told him about the employment arrangements, the end-users or clients, intermediaries, his employer, and any person who provided him with loans, credit or other income as part of the arrangements.[68]I find that the Notice was designed so that HMRC could send similar wording to taxpayers where HMRC might not be aware of the identity of the employing umbrella company or companies. In this case, HMRC accepted that their investigation related to Dr Garai’s employment by Canopaye, so I have amended the Notice to restrict it to items relating to this employment.[69]In Item 1 of the schedule to the Notice, I have retained (although amended for clarity) the requirement for Dr Garai to tell HMRC what he was told about how he would be paid in relation to his employment with Canopaye: his hourly and daily rates, take home pay, any loans, credits or other payments, and how much he would keep after tax or other amounts were taken off. This amounts to a narrative explanation of Dr Garai’s understanding of how he would be paid, and is directly relevant to enabling HMRC to check whether he has paid the right amount of tax.[70]Item 2 requires Dr Garai to tell HMRC the actual amounts he received in relation to his employment by Canopaye, and on which dates. This is clearly reasonably required for checking Dr Garai’s tax position in relation to his employment by Canopaye. I have amended the wording to request information on amounts received “in” (rather than “for”) the relevant period, to align with the information HMRC will need to assess Dr Garai’s income tax liability for the tax years in question.[71]I considered that Item 3 was (with one exception) not reasonably required for checking Dr Garai’s tax position. As I have found above, the names and addresses of other persons involved in the arrangements do not affect Dr Garai’s tax liability. Nor do the addresses of premises where he worked, the dates of assignments, or his daily charge-out rate to clients.[72]Officer McIntyre said that HMRC would want to know Dr Garai’s charge-out rate to clients because if he knew his charge-out rate was, say, £250 per day, but accepted a payment of, say, £60 per day under the National Minimum Wage, this may suggest that one of the reasons he accepted this arrangement was that only part of his remuneration was being declared for tax purposes. However, employees often work for a rate of pay significantly below the rate at which their employers may be able to charge them out to clients, for reasons that have nothing to do with tax. Given this and the burden on Dr Garai of finding this information for the period in question, I have removed this requirement from the Notice.[73]The exception I have made in Item 3 is the request for Dr Garai to state his roles and responsibilities in relation to the assignments he carried out while employed by Canopaye. I accepted HMRC’s submission that this is relevant because if, for instance, he worked as a doctor, HMRC are entitled to be sceptical that he only received the minimum wage. I have therefore retained this request, but amended it for clarity to a requirement to tell HMRC what type of work he carried out, and moved it to Item 1 to fit the structure of the varied Notice.[74]I have largely retained Items 4 to 7, with changes for clarity and to restrict the requested documents to the period beginning on 26 October 2021, which was the date on which HMRC understood that Dr Garai’s employment with Canopaye began. I have also amended Item 4 to permit Dr Garai to redact outgoings from his bank statements, so that he does not have to disclose items of personal expenditure that have no relevance to his tax liability. Mr Dent indicated in the hearing that he had no objection to this.[75]As noted above, I have restricted the requested documents to those relating to Dr Garai’s employment by Canopaye (rather than “employment arrangements” generally), given that his employment by Canopaye was the relevant tax issue identified by HMRC as the reason for issuing the Notice.[76]Item 8 in the original Notice was very wide-ranging. It requested:
“Copies of all correspondence that you received from, or that you sent to, any person involved in the operation or facilitation of the employment arrangements. You should include anything sent to or received from your employer, end user or client, and any intermediary”
[77]As drafted, this item covers correspondence with a range of persons covering any topic at all. It is entirely possible that Dr Garai could have had correspondence with these persons that has no bearing on his tax liability. I have therefore restricted the wording to correspondence sent or received prior to 16 September 2022 (the date of the original request for information, and which HMRC have used as the end-date for the other documents they have requested in the Notice) which relates to how Dr Garai would be paid for the work he carried out while employed by Canopaye.[78]The original Notice gave Dr Garai 30 days to provide the requested information and documents. Taking account of the time that has elapsed since the original Notice was issued, and Dr Garai’s representations regarding the difficulties he may have locating the requested items, I have extended the time for Dr Garai to comply with the varied Notice to 45 days from the date of the issue of this decision.

Conclusion

[79]For the reasons I have given, Dr Garai must provide HMRC with the information and documents that are set out in the varied Notice in Appendix 2 to this decision.[80]I direct that Dr Garai must provide this information and these documents within 45 days of the release of this decision.[81]In accordance with FA 2008, Sch 36, para 32(5), a decision of this Tribunal on an appeal against an information notice is final. Release date: 18 June 2026 Appendix 1: Schedule to the original Notice issued by HMRC 82. The information we need 83. 1 For these employment arrangements: 84.• give us a detailed explanation of what you were told about the employment arrangements - for example your hourly rate, daily rate, retention rate, take home pay and any loans, credit or other payments 85.• tell us the name and business address of each person or entity that told you about the employment arrangements 86.• tell us everything you were told about how much of your earnings you would keep - for example, after tax or other amounts were taken off 87. 2 Details of all amounts received relating to these employment arrangements, whether they were taxed or not, for the period 6 April 2021 to 16 September 2022. Please include the dates and the amount you received on that date. 88. 3 For each separate contract or other agreement relating to these employment arrangements in the period 6 April 2021 to 16 September 2022, tell us: 89.• the name of the end user/client and the address of the premises where you worked 90.• what your roles and responsibilities were 91.• the name and address of each intermediary (sometimes called an ‘agency’) 92.• the name and address of your employer (you may know this as your ‘umbrella company’) - your employer’s name should be on your payslip 93.• the start and finish date for each contract or agreement 94.• your daily ‘charge out’ rate to the end user or client 95.• the name and address of each person, company, trust, partnership or other organisation, that provide you with loans, credit, or any other income as part of the arrangements, and which has not been taxed - please also tell us the amounts of that income 96. The documents we need 97. 4 Copies of bank statements for the period 6 April 2021 to 16 September 2022, showing the deposit of all amounts from these employment arrangements. 98. 5 A copy of each separate contract or other agreement you had relating to these employment arrangements in the period 6 April 2021 to 16 September 2022. 99. 6 Copies of all agreements you had relating to loans, other forms of credit, advances of earnings, bonuses, annuities or other amounts (however they were described), for the period 6 April 2021 to 16 September 2022. 100. 7 A copy of the payslip, letter, email or other notification you received, for each amount you received for the period 6 April 2021 to 16 September 2022. 101. 8 Copies of all correspondence that you received from, or that you sent to, any person involved in the operation or facilitation of the employment arrangements. You should include anything sent to or received from your employer, end user or client, and any intermediary 102. Notes Employment arrangements Includes any plans and preparations made with someone so that something would happen or be possible. This could be anything from agreeing a simple employment contract, to negotiating/buying an employment agreement involving complex steps or processes to decrease the liability to tax on the earnings. End user Sometimes described as a ‘client’. This is any individual, company or other organisation, that you provide your services to. Intermediary Sometimes called an agency company. Includes any individual, company, organisation or other entity which is in any way involved in the provision of your services. Umbrella company An umbrella company, or PAYE umbrella, is a company that self-employed contractors can join as an alternative to setting up (and working through) their own limited company. When you join an umbrella, you become their employee. The umbrella acts as an intermediary between you and your recruitment agency (or end client). It deals with administration (like accountancy and taxes) and means you don’t have to take on the responsibility of running a company yourself. Your umbrella company also handles payroll. They invoice and get paid for the work you complete. Then they pay you through PAYE, deducting costs like taxes, National Insurance contributions and workplace pension payments. Charge out rate The daily, hourly, weekly or other rate charged to the end user or client for your services. Document Anything that information of any description is recorded on. This includes records held on paper, computer, magnetic tape, optical disk (CD-ROM or DVD), hard disk, memory stick, flash drive or other recording media. Correspondence Includes letters, notes of meetings, notes of phone conversations, emails, faxes, and other electronic communications. Appendix 2: Schedule to the Notice as varied by the Tribunal 103. The information we need 104. 1 In relation to your employment by Canopaye Ltd in the period 26 October 2021 to 16 September 2022, tell us: 105.• what you were told about your hourly rate, daily rate, take home pay and any loans, credit or other payments 106.• what you were told about how much of your earnings you would keep - for example, after tax or other amounts were taken off 107.• what type of work you carried out in that period 108. 2 Details of all amounts received relating to your employment by Canopaye Ltd, whether they were taxed or not, in the period 26 October 2021 to 16 September 2022. Please include the dates and the amount you received on each date. 109. 3 [Removed] 110. The documents we need 111. 4 Copies of bank statements for the period 26 October 2021 to 16 September 2022, showing the deposit of all amounts received in relation to your employment by Canopaye Ltd. Outgoings from these bank statements may be redacted. 112. 5 A copy of each separate contract or other agreement you entered into relating to your employment by Canopaye Ltd prior to 16 September 2022. 113. 6 Copies of all agreements you entered into prior to 16 September 2022 in relation to your employment by Canopaye Ltd relating to loans, other forms of credit, advances of earnings, bonuses, annuities or other amounts (however they were described). 114. 7 A copy of the payslips, letters, emails or other notifications you received for each amount you received in relation to your employment by Canopaye Ltd, for the period 26 October 2021 to 16 September 2022. 115. 8 Copies of all correspondence that you received from, or that you sent to, any person prior to 16 September 2022 that relates to how you would be paid for the work you carried out while you were employed by Canopaye Ltd. 116. Notes Document Anything that information of any description is recorded on. This includes records held on paper, computer, magnetic tape, optical disk (CD-ROM or DVD), hard disk, memory stick, flash drive or other recording media. Correspondence Includes letters, notes of meetings, notes of phone conversations, emails, faxes, and other electronic communications.