Advisers have highlighted circumstances where HMRC has requested the
voluntary handover of directors’ financial information.
The requests have come in the context of open enquiries into the companies’
affairs, and have been interpreted as an attempt to investigate directors at the
same time as the company without opening individual enquiries.
Accountancy Age has seen letters sent to advisers on behalf of their
clients asking for directors’ information to be handed over voluntarily.
No attempt is being made to open a formal enquiry against the individuals,
instead the inspectors warn they could use powers granted under Section 20 of
the Taxes Management Act to force handover of the individual’s information,
which includes bank statements and mortgage details. Section 20s are usually
issued where HMRC cannot justify opening an individual enquiry.
Advisers said HMRC was overstepping its powers, and requests issued with
warnings would be rebuffed. ‘Section 20… is being used and abused by inspectors
who dislike the constraints of the self-assessment enquiry regime,’ said Barry
Lewis, senior partner at Harris Lipman.
Chiltern tax investigations partner Steve Beresford said HMRC often has
little reason to investigate individuals linked with companies, so asks for
Smith & Williamson national tax director Richard Mannion said HMRC
inspectors are not transparent about why they extend enquiries into directors’
affairs, which makes advisers extra-protective of clients and causes frustration
HMRC denied claims its inspectors had acted aggressively.
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