HMRC must now tell a tax adviser it plans to seek tribunal approval for a file access notice
GOV and give the adviser a reasonable opportunity to make representations before it appliesGOV. The safeguard applies where HMRC has decided to issue the notice to the adviser and chooses the optional tribunal-approval routeGOV.
The choice of route matters because it decides appeal rights. A file access notice may be issued to the adviser, or to another person believed to hold relevant documents (the document-holder)GOV. Where the notice goes to the adviser, HMRC may — but does not have to — obtain tribunal approval firstGOV; where approval is obtained, the adviser cannot appeal the noticeGOV, while an adviser who faces a notice issued without approval may appeal the notice or any requirement within itGOV. Where the notice goes to a third-party document-holder, tribunal approval is mandatoryGOV, and that person can appeal to the tribunal on the ground that compliance would be unduly onerousGOV.
The wider approval procedure, set out in the tribunal-approval guidance, shows what the new representations step feeds into. Before seeking approval HMRC must tell the document-holder — adviser or third party — that it will require relevant documents, to prevent destruction in the interimGOV; give a reasonable opportunity to make representationsGOV; ensure the application is made by or with the agreement of an authorised officer
Legislation; satisfy the tribunal that Case A or Case B circumstances exist and that the officer is justifiedGOV; and put a summary of any representations made to the tribunalGOV. Prior approval must itself rest on reasonable grounds to suspect the adviser is engaging in, or has engaged in, sanctionable conductGOV, and seeking approval against an adviser is described as limited — for example where an adviser has previously not engaged with or responded to a noticeGOV. The tribunal need only be satisfied the Case A or Case B circumstances exist and the notice will be properly madeGOV; its approval decision carries no onward appeal under sections 11 and 13 of the Tribunals, Courts and Enforcement Act 2007, save the third-party unduly-onerous appeal.
The second change widens how Case A notices describe their scope. A Case A notice — issued on reasonable grounds to suspect sanctionable conduct —GOV may only require relevant documents relating to the clients in respect of whom that suspicion existsGOV, and those clients must be identified in the noticeGOV. The current text states they can now be identified either by name or by reference to a class or description of clientsGOV; the prior text stated only that clients "must be identified", without specifying either routeGOV.
The surrounding overview is unchanged: relevant documents are working papers and other documents received, created, prepared or used in assisting clients; excluded material includes documents out of the person's possession or power, pending-appeal information, personal records, journalistic material, documents over 20 years old and legally privileged informationGOV. Tax advice and audit papers can be requested — unlike under Schedule 36 FA 2008GOV — and the power supplements Schedule 36. Non-compliance risks a £300 initial penalty, daily penalties of up to £60 rising to up to £1,000 on tribunal application after 30 days, subject to reasonable excuse; an inaccuracy penalty of up to £3,000 per inaccuracy; and a conceal-or-destroy offence triable as prosecution or penalties, not both.
Legal basis: FA12/SCH38/PARAS7–25 as amended, including PARA8 (when a notice may issue) and PARA13 (tribunal approval), with TCEA07/S11 and S13 on the absence of appeal against the approval decision.
If you receive a file access notice, use the representations opportunity before any tribunal application and check whether affected clients are named or described as a class.
