HMRC Information Powers: What accountants need to know

The new powers came into force over a year ago, but accountants are still unclear about what it means for them and their clients. Neil Tipping offers a handy summary.

On 1 April 2009 HMRC introduced new information powers arising from Schedule 36 Finance Act 2008, extending the amount of time within which the HMRC can demand information from organisations’ statutory books and records from one year to six. Although the new powers came into force just over a year ago, accountants are still seeking clarification about whether HMRC can access their filed tax returns for years outside the enquiry window, with CCH seeing a 400% increase in calls to its helpline around this issue.

While tax inspectors can make speculative enquires for up to one year when the enquiry window is open, under the new powers they can only request further information for returns where the window has closed if there is reasonable suspicion of underpaid tax or other irregularities with figures. Certain safeguards exist that state tax inspectors need to undertake a risk assessment and can only demand access to a client’s books if there is a specific reason for looking into the return.

Continued...