HMRC data-gathering powers

The following Tax practice note provides comprehensive and up to date legal information covering:

  • HMRC data-gathering powers
  • What are the purposes for which HMRC may use its data-gathering powers?
  • Scope of the powers
  • Relevant data and data-holders
  • Notices and compliance
  • Tribunal approval of data-holder notices
  • Appeals
  • Penalties

HMRC data-gathering powers

HMRC's information powers in Schedule 36 to the Finance Act 2008 (FA 2008) (see Practice Note: HMRC information powers) are supplemented by data-gathering powers in Schedule 23 to the Finance Act 2011 (FA 2011). These data-gathering powers are also known as bulk information powers.

Unlike the FA 2008 information powers, the FA 2011 data-gathering powers are aimed at third parties, known as data-holders, and may not normally be used to investigate the tax positions of the data-holders themselves.

The powers can be used to gather certain types of data from certain categories of persons, known as relevant data-holders. For the most part these are persons, such as employers and banks, who make payments on which the recipients may be required to pay tax, although HMRC has sought to apply the powers more widely to persons holding information that may disclose the existence of undeclared tax liabities. The meaning of a relevant data-holder is set out in more detail below.

What are the purposes for which HMRC may use its data-gathering powers?

The legislation states simply that the data-gathering powers can be exercised to assist with the efficient and effective discharge of HMRC's tax functions. There is no restriction on the use to which the data may be put.

In practice, HMRC uses its data-gathering powers to obtain specific pieces of information about groups of people, for

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