Guidance

Third party information notices — CC/FS23

Updated 22 October 2021

We have given you this factsheet because either:

• we’ve given you a third party information notice
• we intend to ask the independent tribunal that deals with tax to approve our request to give you a third party information notice

If you need help

If you have any health or personal circumstances that may make it difficult for you to deal with this check, please tell the officer that’s contacted you. We’ll help you in whatever way we can. For more details, go to www.gov.uk/get-help-hmrc-extra-support.

What is a third party information notice

A third party information notice is a document that legally requires a person to give us certain information and/or documents to help us check another person’s tax position.

We refer to the person whose tax position we’re checking as the ‘first party’ and we refer to the person we want information and/or documents from as the ‘third party’. For this factsheet and our third party information notice, you are the third party.

When we use third party information notices

Sometimes, when we’re checking a person’s tax position (the first party), we may need information from a third party. This could be because either:

• the first party has not been able to give us information that we need or has refused to
• we need to independently check business or financial transactions that have taken place

We may ask for the information we need to be sent to us voluntarily, or we may use an information notice if we need to, or if the third party prefers us to.

When we need permission to use a third party notice

When we need information and/or documents from a third party, we’ll usually ask the first party to agree to us sending an information notice to a third party. Sometimes we’ll ask the independent tax tribunal to approve the issue of a third party notice.

If we intend to ask an independent tribunal to approve the issue of a third party notice, we’ll normally give both the first party and the third party the opportunity to tell us about any problem the third party may have in giving us the information and/or documents we intend to request. For example, we’ll give both parties the opportunity to tell us if they believe that it would be unduly onerous to comply with a requirement in the notice. If either party expresses any concerns, we’ll bring them to the attention of the tribunal so that they can take them into consideration when deciding whether to approve the issue of the notice.

When a third party information notice asks for business records that the third party is required by tax law to keep, we do not need the agreement of the first party, or approval from the tribunal, before issuing a third party information notice for them.

Different rules apply when we’re checking the Income or Capital Gains Tax position of one or more partners in a partnership. If these rules apply we’ll explain them to you.

What the third party information notice will tell you

If we send you a third party information notice, it will tell you:

• the name of the person to whom it relates (unless the tribunal has decided it does not need to)
• which documents and/or information you must give us
• how and when to give us what we need
• about any appeal rights

What information and documents we can ask for in a third party information notice

We can ask for information and/or documents if we believe they’re relevant to our check of the first party’s tax position, and that it’s reasonable to ask for them.

What information and documents we cannot ask for in an information notice

We cannot use an information notice to ask a third party to give us information or documents:

• that are not in their possession and they cannot get the documents, or copies from whoever holds them
• that relate to the tax position of a person who died more than 4 years before the notice is issued
• that have been created as part of the preparation for a tax appeal
• that are concerned exclusively with a person’s physical, mental, spiritual or personal welfare
• that are privileged communications between lawyers and clients for the purpose of getting or giving legal advice
• if the third party is an auditor, tax adviser or journalist and the information or documents have been created for the purposes of their profession
• if the third party is the subject of journalistic material and the information or documents have been created by a journalist for the purposes of their profession

The rules about what information and documents fall into these categories, especially personal or privileged communications, can be complicated. If you think that anything we’ve asked for may fall into one or more of these categories, please discuss this with the officer who gave you this factsheet.

What happens before we ask an independent tribunal to approve our request to issue a third party notice

We only need to ask a tribunal to approve a third party information notice when:

• the information or documents we need are not statutory records that relate to the supply of services or the acquisition of goods and services
• the person whose tax position we’re checking has not given us permission to give the third party an information notice

Before we ask an independent tribunal to approve a notice, we’ll normally give both the first party and the third party the opportunity to make representations to the tribunal about the information or documents we intend to request. The first party or the third party cannot however attend the tribunal hearing.

If we’ve written to you to tell you that we intend to ask the tribunal to approve our request to give you a third party notice, we’ll have sent you a copy of this factsheet. If you want to make representations, for example, because you believe that it would be unduly onerous to comply with a requirement in the notice, please let us have your reasons by the date in our letter. If, however, it’s more convenient for you to provide us with the information and/or documents on a voluntary basis before we ask the tribunal to approve the information notice, please send the information and/or documents we need to the HM Revenue and Customs (HMRC) officer who wrote to you.

What to do if you disagree with a third party information notice

If we send you an information notice and you think that the request is unreasonable, and we do not agree, you may be able to appeal to the independent tribunal that deals with tax appeals. We’ll tell you how to do this when we give you the notice.

You cannot appeal against a third party information notice that has either been approved by an independent tribunal or is a request for statutory records that relate to any of the following:

• the supply of goods or services
• the acquisition of goods from another member state
• the importation of goods from a place outside the member states in the course of carrying on a business

You can only appeal against a third party information notice that has been approved by the first party when it would be unduly onerous to comply with the notice or a requirement in the notice.

What happens if you fail to comply with a third party information notice

To comply with the notice, you must give us everything that the notice asks for, by the date stated in the notice — or by a later date if we’ve agreed one with you. If you do not comply with the notice, we may charge you a penalty of £300. If you still have not complied with the notice by the time we’ve charged you the £300 penalty, we may then charge you daily penalties of up to £60 a day for each day that you do not comply.

Any information you give us must be correct as far as you know. If you give us information or documents that you know are wrong without telling us what is wrong, then you may have to pay a penalty up to a maximum of £3,000.

If you conceal, destroy or otherwise dispose of any document we’ve asked for in a tribunal approved notice, or arrange for it to be concealed, destroyed or disposed of, you may have to pay a penalty or you may be prosecuted. If we charge you a penalty it will be £300. We’ll then charge you daily penalties of up to £60 a day for each day you fail to comply with the notice.

For the most serious cases the upper-tier independent tribunal can also impose a further penalty based on the tax that is put at risk by the failure to comply with the notice, concealment, disposal or destruction of the document.

If we agree that you have a reasonable excuse for not giving us information or documents, we will not charge you a penalty but we’ll still ask you to provide the information, documents (or replacement documents) within an agreed amount of time.

A reasonable excuse is something that stopped you from meeting a tax obligation on time which you took reasonable care to meet. It might be due to circumstances outside your control or a combination of events. Once the reasonable excuse has ended, you must put things right without any unnecessary delay.

Whether you have a reasonable excuse depends upon the particular circumstances in which the failure occurred and your particular circumstances and abilities. This may mean that what is a reasonable excuse for one person may not be a reasonable excuse for someone else. If you think you have a reasonable excuse please tell us.

Examples of reasonable excuse may include, when:

• you have been seriously ill
• someone close to you has died
• you have lost the documents in a fire or flood

Other types of third party information notices

Third party information notices when the identity of the first party is unknown

This type of notice requires a third party to provide us with information and/or documents about either:

• a person whose identity is not known to us
• a class of persons whose individual identities are not known to us

Normally, this type of notice can only be considered where there are reasonable grounds for believing that failure by a person or persons unknown to comply with the tax law may seriously prejudice the assessment or collection of tax. There are a few exceptions to this rule that relate to, pension matters, subsidiaries, partners, and involved third parties. If these do apply we’ll tell you and explain what the exceptions mean.

This type of notice must be approved by an independent tribunal and issued by a specialist officer of HMRC.

Identification notices

This type of notice requires a third party to provide us with information that will help us identify a first party from other information that we hold, for example an invoice or credit card number. The information we can ask for using this type of notice is restricted to the person’s name, address and date of birth (if known).

This type of notice must be issued by a specialist officer of HMRC. We do not need approval from an independent tribunal to issue this type of notice.

Your principal rights and obligations

You have:

• the right to be represented — you can appoint anyone to act on your behalf, including professional advisers, friends or relatives
• the right to consult your adviser — we’ll allow a reasonable amount of time for you to do so
• an obligation to take care to get things right — if you have an adviser, you must still take reasonable care to make sure that any returns, documents or details they send us on your behalf are correct

The ‘HMRC Charter’ explains what you can expect from us and what we expect from you. For more information, go to www.gov.uk and search for ‘HMRC Charter’.

Compliance checks related to this factsheet

This factsheet relates to compliance checks for:

• Aggregates Levy
• Annual Tax on Enveloped Dwellings
• Bank Payroll Tax
• Capital Gains Tax
• Climate Change Levy
• Construction Industry Scheme
• Corporation Tax
• Electronic Sales Suppression
• Income Tax
• Inheritance Tax
• Insurance Premium Tax
• Landfill Tax
• Machine Games Duty
• National Insurance Classes 1, 1A* and 4
• Pay As You Earn (PAYE)
• Penalties for facilitating avoidance schemes involving non-resident promoters
• Petroleum Revenue Tax
• Stamp Duty Land Tax
• Stamp Duty Reserve Tax
• VAT

*For Class 1A National Insurance, this factsheet only relates to P11D(b) returns for tax years starting on or after 6 April 2010.