Deep within the Finance Bill for 2021-22 lay amendments to powers for HMRC to collect financial data on taxpayers. Using a new financial institution notice, the Taxman will have an easier route to gaining information about a person's finances to help with clamping down on tax evasion and tax avoidance.
The new legislation states, an officer of the Revenue and Customs may by notice in writing require a financial institution to provide information or produce a document as long it would not be onerous for the financial institution to provide or produce it. The request can be made as long as it is made for the purpose of checking the tax position of a taxpayer or for aiding in collecting a tax debt of the taxpayer.
The taxpayer will receive a copy of the request made to the financial institution, along with a summary of the reasons why the information/documents were requested. However, a tax officer can apply to the tribunal to remove the need to send a copy of the request or provide a summary of reasons to the taxpayer.
Currently HMRC cannot do the above without first gaining approval from a taxpayer but soon this will change.
HMRC will be able to gain additional third-party data on a taxpayer from:
- Banks, Building Societies and other financial institutions
- Tax agents/accountants/advisers
- Credit/Debit card information
HMRC already gathers information from a variety of other sources including:
- Credit reference agencies
- Foreign tax offices
- Driving records, passport information and travel records
- Land registry data