Consultation on Amending HMRC’s Civil Information Powers

17 July 2018

A consultation has been published which reviews a number of aspects of HMRC’s information powers. Its aim is to ensure they have remained effective and efficient in the ten years since they were enacted.

It is now over a decade since the current framework of information provisions was enacted following the Review of Powers. Many of these powers mirror provisions that date back to the 1970s. This consultation is an opportunity to review aspects of these provisions, to ensure they remain appropriate, enable HMRC to carry out its functions efficiently and effectively, and also to consider whether the relevant safeguards remain proportionate. There are a number of anomalies in the current rules which could be addressed.

Since the 1970s digitalisation has led to significant changes in the way businesses work. These changes include:

  • The UK has seen a continuing decline in the use of cash resulting in many more payments being handled electronically

  • Securities trading has become almost entirely electronic

  • The use of paper bank statements is starting to decline

  • Traditional banks and building societies are seeing new competition from start-up “banks” which often have no physical branches

  • New International agreements to facilitate the exchange of bank data between countries

These changes, as well as many others, have resulted in much more information being held electronically. Financial records, in particular, can now be shared with greater ease than ever before as the financial system becomes ever more flexible. It is important that HMRC regularly reviews its processes to ensure they are keeping pace with such a rapidly changing world.

Current legislation does not allow HMRC to obtain information for debt collection purposes or where a company, usually created in contrived circumstances, has no tax liability. A change that is discussed here would allow HMRC to access information that was reasonably required for all its tax functions, including the collection of tax debt.

The consultation will run until 2 October 2018.

The policy team will be reviewing the consultation in full and if deemed necessary will invite your opinions via an electronic survey.