A6.614 Restrictions on HMRC's information powers
HMRC has various powers to obtain information and documents from various persons for the purposes of checking a taxpayer's 'tax position' or collecting a 'tax debt' of the taxpayer1.
These powers are summarised in A6.610, which also includes the definition of 'tax position' and 'tax debt'.
This article discusses the restrictions on HMRC's information powers.
Restrictions on information notices—overview
The legislation places certain restrictions on HMRC in terms of the classes of information and documents that it can obtain and the persons from whom information and documents can be required. The following restrictions apply to all information notices.
Must be in the person's power or possession
The information or documents requested must be 'reasonably required'2 (see A6.610 for a discussion of this term) or the purposes of checking a taxpayer's tax position or collecting a tax debt of the taxpayer and it must be in the person's 'power or possession'3.
In HMRC's view, 'in their possession' means that the person has physical control over the document. It does not matter to whom the document belongs. 'In their power' means that the person has the ability to get the document, or a copy of it, from whoever holds it.4
Where the taxpayer can demonstrate that the information (or document) is not within their power or possession, they will not have failed to comply with the notice and no penalty is due. See A4.572 for an overview of the penalties for failing to comply with an information notice.
Information and documents that cannot