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Paragraph 4A of annex 36 of the finance law (“FA”) 20081 gives HMRC the power to obtain information and documents from financial institutions via a Financial Institution Notice (“FIN”). According to HMRC, this power was to “have a negligible impact on around 20 financial institutions”,2 such as banks and building societies. HMRC should inform the Treasury of the number of FINs issued “as soon as reasonably possible after the end of each financial year”.3 Their negligible or non-negligible impact will be known with certainty following this report.
The main characteristics of this power are:
- FINs are documents issued by an authorized officer of HMRC to a financial institution requiring the production of certain information specified in the FIN.
- Two conditions must be met for HMRC to issue a FIN:
- It must not be “onerous for the institution to provide or produce” the information, and
- “The information or document is reasonably required by the agent” to verify a taxpayer’s tax status or to collect a tax debt from the taxpayer.
- The FIN must contain the name of the taxpayer to whom it relates and the reasons why the information is required. The HMRC officer should give a copy of the FIN to the relevant taxpayer.
- Neither FTT approval nor taxpayer consent is required to issue a FIN. A financial institution cannot appeal against a FIN.
- Paragraph 61ZA of Schedule 36 of the FA 2008 establishes that the financial institution means:
- Specified Depository Institutions, Custodial Institutions and Insurance Entities as defined by the OECD Common Reporting Standard for Automatic Exchange of Financial Account Information, or
- “A person who issues credit cards”.
- FA 2021 Schedule 34 sets out additional rules for special circumstances, including penalties for those who violate a requirement imposed under the new FA 2008 Schedule 36 paragraph 51A.
1 Incorporated by article 126 of the 2021 finance law.
2 HMRC, “Amendment to HMRC civil information powers” (3 March 2021).
3 BA 2021 art 126(4)(5).
Originally published March 10, 2022
The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.
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