HMRC has published its first report on the use of financial institution notices (FINs) showing that, since their introduction, FINs have helped HMRC reduce the time taken to respond to tax information requests from 12 months to just over 6, bringing the UK more closely in line with other jurisdictions and moving closer to the OECD minimum standard.
HMRC has the power to issue a FIN to secure information it reasonably requires for the purpose of checking an individual taxpayer’s tax position or collecting a tax debt.
‘The report includes a number of important updates, most notably an unexpected retreat on HMRC’s proposal, previously undisclosed, to use FINs to collect location data,’ Jack Prytherch, of counsel at CMS, observed. ‘Fortunately, as made clear in the report, HMRC has decided not to go ahead with this proposal following discussions with representatives of the industry.’
Prytherch, however, noted that the report showed that HMRC plans to go ahead with another proposed use of FINs (which, like location data, was also not specifically considered as part of the consultation process), namely using FINs to obtain information on employees and contractors of financial institutions (as opposed to their customers). This was despite concerns that it would unfairly put financial institutions in a different position to other employers.
‘FINs represent a significant and potentially wide-reaching power in HMRC’s arsenal.’ Prytherch said. ‘The latest information indicates that HMRC is willing to use this power in previously unanticipated ways and potentially on a scale larger than expected.’
HMRC has published its first report on the use of financial institution notices (FINs) showing that, since their introduction, FINs have helped HMRC reduce the time taken to respond to tax information requests from 12 months to just over 6, bringing the UK more closely in line with other jurisdictions and moving closer to the OECD minimum standard.
HMRC has the power to issue a FIN to secure information it reasonably requires for the purpose of checking an individual taxpayer’s tax position or collecting a tax debt.
‘The report includes a number of important updates, most notably an unexpected retreat on HMRC’s proposal, previously undisclosed, to use FINs to collect location data,’ Jack Prytherch, of counsel at CMS, observed. ‘Fortunately, as made clear in the report, HMRC has decided not to go ahead with this proposal following discussions with representatives of the industry.’
Prytherch, however, noted that the report showed that HMRC plans to go ahead with another proposed use of FINs (which, like location data, was also not specifically considered as part of the consultation process), namely using FINs to obtain information on employees and contractors of financial institutions (as opposed to their customers). This was despite concerns that it would unfairly put financial institutions in a different position to other employers.
‘FINs represent a significant and potentially wide-reaching power in HMRC’s arsenal.’ Prytherch said. ‘The latest information indicates that HMRC is willing to use this power in previously unanticipated ways and potentially on a scale larger than expected.’
