Schedule 36 Notices, HMRC information requests, by Keith Gordon (Claritax Books, £85)

Schedule 36, Finance Act 2008, provides HMRC with the power to obtain documents and information from taxpayers and third parties and is the main weapon in HMRC’s armoury when it comes to enquiries and investigations. This book sets out to explain the extent of HMRC’s powers, together with the limitations and safeguards created by statute or tax case precedents, and is essential reading for anyone involved with HMRC enquiry work.

Set out in 14 separate sections, the book goes from a basic overview of HMRC’s information powers to explain the circumstances when a notice can (or cannot) be issued, then on through what can be ‘reasonably required’ and the various differing types of notices, to appeals against notices, penalties for non-compliance and so on. It provides helpful commentary on some of the more refined issues, such as the meaning of ‘statutory records’ and the application of the statutory records test.

The great strength of this book is that, unlike many such learned texts, it is immensely readable and littered throughout with helpful extracts of relevant tax cases. It contains many useful quotes that the typical tax dispute practitioner may find it useful to draw to HMRC’s attention. A point that comes through repeatedly is how frequently HMRC may itself have misunderstood the legislation, its powers to obtain documents and information, and the limitations on those powers. Indeed, one might go on to express the hope that this book will become essential reading for HMRC investigators themselves. Certainly, the vast number of tax cases that have featured arguments about Sch 36 since its introduction in 2008 suggests that there is clearly a need for greater awareness within HMRC of the technical complexities of the powers.

It is difficult to find a fault with the book, but if one were to nit-pick it would be to suggest that the section regarding the clarity of the wording of information notices could perhaps benefit from some slight expansion. Day-to-day experience suggests that one of HMRC’s greatest failings is in the drafting of notices in terms that clearly specify and define exactly what it is that HMRC is seeking. It is not unusual to see notices that ask in vague terms for items such as “full details of all the documentation supporting any journal adjustments etc in the accounting records”, where the meaning of the request is so ill-defined (especially by the inclusion of the odd ‘etc’) as to make it incapable of being complied with. To be fair to the author, such notices are often rescinded at the independent internal review stage and so rarely reach a Tribunal, but it does seem to be an aspect of information notices where HMRC is seriously lacking in ability.

That very minor point aside, this book should prove a very welcome and useful addition to the library of any practitioner whose work brings them face to face with any HMRC information notices.

About the author

Tony Monger, Director, Tax Investigations, Mazars