Guidance

Information notices — promoters of tax avoidance schemes — CC/FS62

Updated 25 May 2022

This factsheet tells you about the information notices we may give under the promoter of tax avoidance schemes (POTAS) rules. This factsheet is one of a series. For the full list of factsheets in the series, go to www.gov.uk and search for ‘HMRC compliance checks factsheets’.

If you need help

If you have any health or personal circumstances that may make it difficult for you to deal with us, tell the officer that’s contacted you. We’ll help you in whatever way we can. For more information about this, go to www.gov.uk and search for ‘get help from HMRC if you need extra support’.

You can also ask someone else to deal with us on your behalf, for example, a professional adviser, friend or relative. We may however still need to talk or write to you directly about some things. If we need to write to you, we’ll send a copy to the person you’ve asked us to deal with. If we need to talk to you, they can be with you when we do, if you prefer.

What an information notice is

An information notice is a document that legally requires a person to give us certain information, documents or both. If they do not, we may then charge them penalties. The information or documents (or both) must be for a relevant purpose in relation to a relevant person.

We explain the terms ‘relevant purpose’ and ‘relevant person’ below.

When we give an information notice

If we’re checking for a relevant purpose, we’ll normally ask you to help by giving us the information and documents that we need. If you do not do this, we may give you an information notice. Sometimes we may need to give an information notice without having asked for the information or documents first.

In some circumstances, we may ask the independent tribunal that deals with tax to approve the issue of an information notice. We’ll tell you if the notice we give you has been approved by the tribunal.

What the information notice will tell you

The information notice will tell you:

• what documents or information (or both) you need to give us
• why you’re a relevant person
• what the relevant purpose is
• how and when to give us the information or documents
• what happens if you do not comply with the notice
• about any appeal rights if you disagree with the notice

What we can ask for in an information notice

We can ask for any information or documents (or both) if we believe they are for a relevant purpose and that it is reasonable to ask for them.

What we cannot ask for in an information notice

We cannot use an information notice to ask you for information or documents that:

• you do not have, and you cannot get (or cannot get copies of) from whoever has them
• relate to a relevant person who died more than 4 years before we issue the notice
• have been created as part of the preparation for an appeal under Part 5 of the Finance Act 2014
• are about a person’s physical, mental, spiritual or personal welfare, and not about anything else
• are privileged communications between lawyers and clients for the purpose of getting or giving legal advice

The rules about what information and documents fall into these categories can be complicated. If you think that anything we’ve asked for may fall into one or more of them, talk to the officer who sent you the notice. You can find more information about privileged communications in the section ‘Legal professional privilege’ below.

What is a ‘relevant person’

A person is a ‘relevant person’ if (one or more of the following):

• we suspect the person carries on or carried on a business as a promoter in relation to a relevant proposal or relevant arrangements, and we suspect that the person (one or more of the following):
  • has met a threshold condition
  • could be given a defeat notice
  • promotes, or has promoted arrangements or a proposal that we suspect could be specified in a stop notice
• we suspect that the person made a relevant transfer, or was someone a relevant transfer was made to
• the person is or was subject to a conduct notice, monitoring notice, or stop notice

We explain all the terms shown above in our guidance online. Go to www.gov.uk and search for ‘promoters of tax avoidance schemes guidance’.

What is a ‘relevant purpose’

The following are relevant purposes in relation to a relevant person:

• determining whether the person carries on, or has carried on, a business as a promoter in relation to a relevant proposal or relevant arrangements
• determining whether they have met a threshold condition
• determining whether they can be given a defeat notice
• determining whether they have provided false or misleading documents or information in relation to a conduct notice, monitoring notice, or stop notice
• determining whether arrangements or proposals that we suspect the person of promoting could be specified in a stop notice
• enabling us to understand how arrangements or proposals, that we suspect the person of promoting, operate
• identifying any person whose connection to the relevant person may make the relevant person a member of a promotion structure
• determining whether the relevant person has made a relevant transfer, and if so, to whom
• determining whether a relevant transfer was made to the relevant person and by who
• monitoring compliance with any stop notice, conduct notice, or monitoring notice that the relevant person is subject to

We explain when persons are ‘connected’ in our guidance online. We tell you how to find that guidance in the section above called ‘What is a relevant person’. We explain the term ‘promotion structure’ in our guidance online. Go to www.gov.uk and search for ‘tackling promoters of tax avoidance guidance’.

What to do if you disagree with an information notice

If we send you an information notice, it will tell you what you can appeal against, and how to appeal.

You may be able to appeal against:

• the notice itself, if you think that the request is unreasonable or not for a relevant purpose in relation to a relevant person
• anything we’ve asked for in the notice, except for in some cases where we’ve asked for statutory records (see below)

If you want to appeal, you need to write to the officer who sent you the information notice within 30 days of the date the notice was given. You need to tell them what you’re appealing against and why. They will carefully consider what you say and try to reach agreement with you. If you cannot reach agreement, you can ask for an independent tribunal to consider your appeal. We’ll tell you how to do this.

You cannot appeal against an information notice (either of the following):

• that has been approved by an independent tribunal
• where the required information or documents forms part of your statutory records

Statutory records are the records that tax law says a person must keep.

If you need more time to give us what we’ve asked for, you should contact the officer who sent you the information notice.

Asking another person for information or documents about you

If you cannot or do not provide us with what we’ve asked for, we may need to get it from another person. If this is the case, we’ll normally ask for your permission before we contact them.

You do not have to give us permission, but we’ll ask you to tell us why you’ve not given it. If you do not give permission and we still need to get the information or documents, we’ll normally ask the independent tribunal that deals with tax for approval to give an information notice.

Sometimes we may need to give another person an information notice without asking you for the information or documents first. If we ask another person for information or documents, we’ll have to give them enough information about you so that they can give us what we need. We’ll not tell them any more about you than we have to.

What happens if you do not comply with an information notice

If you do not comply with an information notice, we may charge you penalties. We may also give you a conduct notice. There is more information about each of these below.

Penalties

If you do not give us everything the notice asks for by the deadline, we may charge you an initial penalty. That penalty will be up to £5,000. If you’re subject to a monitoring notice, or had control or significant influence over a person who was, the penalty may be increased to up to £1,000,000.

If you have still not complied with the notice by the time we’ve charged you the initial penalty, we may then also charge you daily penalties. These will be up to £600 a day for each day that you do not comply. If you’ve been charged an increased initial penalty of up to £1,000,000, then the daily penalty may be increased to up to £10,000 a day.

When we’ll not charge you a penalty for not complying

If we agree that you have a reasonable excuse for not complying with the information notice, we’ll not charge you a penalty for not complying. Instead we’ll ask you to give us the information or documents (or replacement documents) by an agreed date.

A reasonable excuse is something that stopped you from meeting an obligation on time that you took reasonable care to meet. Whether you have a reasonable excuse depends upon the circumstances in which the failure occurred and your particular circumstances and abilities. Once the reasonable excuse has ended, you must have put things right without delay. For examples of what does and does not count as a reasonable excuse, go to www.gov.uk/tax-appeals/reasonable-excuses.

If you think you have a reasonable excuse, tell us.

Conduct notices

A conduct notice imposes conditions on how you may behave in your business as a promoter.

If you do not comply with the conduct notice we may apply to the independent tribunal which deals with tax to send you a monitoring notice. A monitoring notice imposes additional obligations on you. If you do not comply with a monitoring notice, you may be liable to penalties.

You can find more information about conduct notices and monitoring notices in our guidance online.

Penalties for giving inaccurate information or documents

If you carelessly or deliberately provide inaccurate information or produce a document containing an inaccuracy, we may charge you a penalty of up to £5,000. If you’re subject to a monitoring notice, or had control or significant influence over a person who was, the penalty may be up to £1,000,000.

We’ll not charge you a penalty if you tell us about the inaccuracy at the time you provide the information or produce the document. If you later find an inaccuracy, you must tell us without delay.

Concealing, destroying or otherwise disposing of documents

We may charge you a penalty if you or another person acting on your behalf conceals, destroys, or disposes of any document that we:

• have asked for in an information notice
• told you that we intend to ask for in an information notice

Concealing, destroying or otherwise disposing of documents — tribunal approved notices

It is a criminal offence to conceal, destroy or otherwise dispose of any document that we:

• have asked for in an information notice that has been approved by the tribunal
• told you that we intend to ask for in an information notice that has been approved by the tribunal

We may carry out a criminal investigation with a view to prosecution if you or someone acting on your behalf commits this offence.

What happens if you give us information that you know to be untrue

We may carry out a criminal investigation with a view to prosecution if you give us information that you know to be untrue, whether verbally or in a document.

Legal professional privilege (LPP)

We cannot insist that you give us information or documents that are covered by LPP, and which you can refuse to give us because of that privilege. However, if you choose to give them to us, this may help us with our check. If you give them to us, the right for them to stay private would be lost.

LPP is an area of the law that only applies in limited circumstances. If you refuse to give us any of the information or documents we’re asking you for because of LPP, we may challenge that it applies if we do not agree. You may decide not to give us certain information or documents because you believe they are covered by LPP. If you do, you’ll need to let us have a list of everything you’re not giving to us. The list should describe each piece of information or document that you’re not giving to us and say why you’re not giving it. You do not have to describe the information or document if describing it would mean revealing private information covered by the privilege.

Our privacy notice

Our privacy notice sets out the standards that you can expect from us when we ask for information or hold information about you. Go to www.gov.uk and search for ‘HMRC Privacy Notice’.

If you are not happy with our service

Tell the person or office you’ve been dealing with. They’ll try to put things right. If you are still not happy, they’ll tell you how to make a formal complaint.