The First-tier Tribunal (FTT) has found in favour of a taxpayer who didn’t wish to hand over information to HMRC.  The taxpayer, a director at a firm of accountants, and his wife had transferred shares in the company that taxpayer was a director of to his father who was resident for tax purposes in Cyprus.  Significant dividends were then paid to the overseas father.  HMRC had requested schedules of the taxpayers’ UK and overseas bank or building society accounts along with copy statements.  The information request also covered the taxpayers’ minor children or any account that the taxpayer was a signatory of.

HMRC had already issued discovery assessments to the taxpayer and his wife, and these discovery assessments had been appealed and were waiting to go to tribunal.  The FTT concluded that little could be achieved by enforcing the information notices since the taxpayer and his wife obviously disagreed with HMRC on the tax treatment of their affairs.  By upholding the information notices delay would be caused to the appeal of the discovery assessments and this served no one.

The answer may have been different where the taxpayer was not already appealing discovery assessments.

The case can be found at: The Finance & Tax Tribunal (tribunals.gov.uk)

Please contact us if you receive an enquiry from HMRC, we can help.  In this case, while the taxpayer won his challenge against the information request this appeal was only allowed due to his specific situation.  Information notices can be appealed where an enquiry is not open or where the information requested is not reasonable or where HMRC have no reason to suspect under declaration of income or over claiming deductions and reliefs.