What to watch out for

The new HMRC will continue to use the old Inland Revenue information powers. The three main notices seen are those under Section 19A TMA 1970 in respect of ITSA enquiries, para 27 schedule 18 FA 1998 in respect of CTSA enquiries and those issued under section 20 TMA 1970.

The documents or information requested under self assessment enquiry notices must be relevant to the return under enquiry and must be proportionate to the nature of the enquiry.

For notices under Section 20 particular care must be taken. A notice under section 20(1), whilst becoming more prevalent, is not normally issued unless the inspector is concerned that he cannot obtain the information being sought by SA enquiry notices or by direct co-operation from the subject of the enquiry. Clearly if this point has been reached something may have gone awry in the enquiry and specialist help should be sought.

If a notice under section 20(3) is received this will be for information requested in respect of a third party. Clearly where there is an ongoing business relationship appropriate advice should be obtained.

In addition the inspector can issue a notice under section 20BA TMA 1970. This is a wide ranging power that is usually reserved for the most serious of cases and again enables the inspector to obtain information from a third party. There are strict rules regarding such notices and any recipient should immediately seek specialist advice.

With all such powers there are restrictions on what can be obtained with them and by whom they can be used. It is always beneficial to review the circumstances surrounding the issuing of a notice to ensure that the inspector is acting fairly and reasonably.