Sch 36 Information Notices

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There are a growing number of appeals against Sch 36 Information Notices issued by HMRC. This is indicative of their increasing use, and not simply in relation to tax and VAT avoidance cases.

In this case, HMRC challenged the accuracy of cross-border supplies of goods. The company made supplies to other businesses in Ireland and Bulgaria and completed EC Sales Lists. Requests were received from Irish and Bulgarian tax authorities for certain information.

The first issue is that, where records are required by statute, and HMRC issue a Sch 36 Notice in respect of those records, the taxpayer has no right of appeal. “If a taxpayer has a legal obligation to keep certain records, HMRC has a right to see those records, and there is no right of appeal against a notice requiring their provision” (para 21). 

But, where records were not reasonably required for the checking of a taxpayer’s tax position, the appeal was allowed (para 3). HMRC asked for “confirmation of who arranged for collection, delivery and payment of the goods.” The Tribunal considered the taxpayer’s argument that the documents were requested for the purposes of providing information to overseas tax authorities, not the check the appellant’s VAT Returns. The Tribunal concluded that there was no link between the documents requested and the zero-rating of supplies of the goods in question and allowed the appeal.

The Tribunal also considered the validity of the Sch 36 Notice in its failure to include specific dates. Previous correspondence with the taxpayer had indicated the dates on which challenged supplies had been made. The recipient must have known what was being requested.

The decision is interesting, and it is possible that it will be appealed.


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