CH232100 - How to do a compliance check: information powers: financial information notices: deciding to issue a financial institution notice

Before sending a Financial Institution Notice (FIN) to a Financial Institution you should usually first try to obtain the information from the person whose tax position you are checking, see CH23100. One exception to this is in cases where you intend to seek Tribunal approval to disapply the legal requirements of advising the taxpayer about the FIN, see CH23140.

You should not normally issue the FIN before the deadline to provide information under any taxpayer notice that you may have issued has expired. If the taxpayer has missed the deadline but you are expecting the documents and information to be provided soon after this deadline you should be flexible about whether to issue a FIN. You should issue a FIN when you consider that the taxpayer is unlikely to comply with the taxpayer notice.

Where you are working on an Exchange of Information with an overseas treaty partner, see CH232550.

You should consider the request you plan to make carefully, see CH23100, and ensure that what you are asking for is not onerous for the Financial Institution to provide, see CH232200.

If you are in doubt about whether the document and information request is onerous you should consider using a tribunal approved third party notice and discuss your concerns with the authorised officer.

You may approach the Financial Institution without needing approval from the taxpayer or the tribunal, by using a FIN, if:

  • The person does not have the information/documents and cannot obtain them themselves (see Note 1), or
  • The customer does not provide the information/documents even after use of a taxpayer notice (see Note 2), or
  • The person has failed to provide the information/documents to an overseas treaty partner in Exchange of Information, or
  • There are other reasons why it is not appropriate to obtain the information/documents through the customer (see Note 3).

Note 1 – most people either have copies of, or access to, their account statements or can get copies from their account provider. In general, this should be your first consideration (but also see Notes 2 and 3).

Note 2 - You don’t have to wait for penalties to be charged (or you may decide not to pursue penalties). However, if you consider that penalties may provide an incentive for the taxpayer to comply with the notice, you need to be aware of the time that this might add to obtaining the information and documents if you need to then issue a FIN, especially if assessing time limits are a factor (in such cases, it may be more appropriate to move directly to a FIN).

Note 3 – this might include a scenario where you feel it is highly unlikely the person will comply, or where you intend to seek Tribunal approval to dispense with the requirements to provide a copy of the FIN.

Seeking Tribunal Approval for the FIN

Tribunal approval is required, see CH23140, where you want to seek permission to disapply the legal requirements to:

  • name the taxpayer it relates to in the FIN, and/or
  • send a copy of the notice to the taxpayer it relates to, see CH232600 and/or
  • send a summary of reasons to the taxpayer it relates to, see CH232700.

Any application to the Tribunal must be approved by an authorised officer.