Review of HMRC's Powers, Deterrents and Safeguards

Data-gathering powers (previously bulk and specialist information powers)

These powers fall into two broad categories:

• Bulk information powers which are used by HM Revenue & Customs (HMRC) to gather specific pieces of information about a group of taxpayers, for use in risk analysis.
• Specialist unnamed taxpayer powers which are narrowly defined in law to be used only in very specific circumstances, usually during a compliance check, for example where it is not clear who the taxpayer is.

This area of the Review's work is about how to modernise and bring these powers and safeguards in line with the compliance checking framework introduced on 1 April 2009 for HMRC's main taxes and which was extended to other taxes and duties from 1 April 2010.

Section 86 and Schedule 23 of the Finance Act 2011 contains a single new power to apply to a range of data-holders from 1 April 2012. Existing information powers will be repealed from that date. The new power will apply for the purposes of certain foreign taxes in order to improve the UK’s ability to exchange information with treaty partners. In addition, Schedule 36 to FA 2008 was amended by section 86 and Schedule 24 of the Finance Act 2011so that it also applies to foreign taxes and to provide for a penalty if a person is aware of an inaccuracy when providing information or documents.

Regulations are required to be made to define 'relevant data' before the power in Schedule 23 can be used. Draft regulations were published for consultation on 9 December 2010 and on 22 June 2011. The regulations are due to be made in early 2012 and will come into effect on 1 April 2012.

To allow time for banks to make the necessary system changes it has been agreed that HMRC will only require National Insurance numbers to be provided under Schedule 23 for new accounts opened on or after 6 April 2013.

Consultation

Draft of the Data-Gathering Powers Regulations 2011 and explanatory commentary (PDF 75K)

Draft regulations and explanatory commentary were published on 22 June 2011 for comment by 30 September 2011.

Data-gathering powers – Summary of responses – 31 March 2011

Data-gathering powers - Consultation document - 9 December 2010

Data-gathering powers - Tax Information and Impact Note – 9 December 2010

Draft Finance Bill clauses, together with draft regulations were published for consultation on 9 December 2010. Following consultation on the draft legislation a new safeguard has now been added so that, where a notice requests documents, they need only be provided if in the possession or power of the person to whom the notice is sent. A response document was published on 31 March 2011.

Bulk and specialist information powers - Consultation Response Document December 2009

This document summaries comments made on the initial consultation and discusses the way forward.

The two key themes emerging from the responses were:

• the opportunity should be taken to update the bulk powers
• there should be more dialogue with data-holders, particularly about how powers are exercised in practice

Bulk and specialist information powers - Consultation Document July 2009

This initial consultation sought views on proposals to modernise HMRC's bulk and specialist information powers, improve accompanying safeguards and to repeal further legislation.