Sch 36 Appeal successful

Anecdotal evidence suggests that HMRC issue Sch 36 Information Notices more frequently than they used to. As a result, there is a constant stream of Appeals, where the taxpayer wishes to challenge some aspect of the process.

In The Barty Party Co Ltd, the taxpayer argued that the Notice was invalid. The Tribunal upheld the Appeal.

The main successful ground for Appeal was that the Notice included documents which had been previously reviewed by a HMRC Officer, and that were over four years old. The only response from HMRC was that “they usually asked for 6 years’ worth of information.”

The Tribunal concluded that: “we have concluded that the scope of the information requested in the Information Notice of 10 November 2016 went beyond what was reasonably required to check the taxpayers tax position and that Information Notice was not validly issued.”

HMRC also asked for Annual Accounts for 2014/15, which are statutory records (FA 2008, Sch 36, s62). There is no right of Appeal for such a request (s29(2)), although one wonders why HMRC asked for records that they presumably already had access to.

The argument referring to ‘an aggressive and buying act by HMRC’ was not addressed by the Tribunal, as the Tribunal has no power to consider the reasonable-ness of HMRC’s behaviour (paras 61-62). Nevertheless, it is a matter of some concern.

The decision is here: http://www.bailii.org/uk/cases/UKFTT/TC/2017/TC06116.html