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HMRC internal manual

Appeals reviews and tribunals guidance

HM Revenue & Customs
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Applications to the tribunal: Authorisation for unannounced inspections of business premises or permission to issue a taxpayer notice or third party notice to produce documents or information

Where a decision maker makes an application to the tribunal for approval for an unannounced inspection of business premises (Pt 2 Sch 36 FA 2008) or a taxpayer notice or third party notice to produce documents or information to HMRC (Pt 1 Sch 36 FA 2008), they should request a ‘without notice’ hearing to be held in private, see ARTG7530.

The appropriate application form and notice on SEES should be used. Where the application is for an unannounced inspection, the notice tells the customer the rules relating to the inspection by HMRC:

  • they can inspect premises, business documents and business assets if reasonably required for checking a customer’s tax position (Sch 36 para 10 (1))
  • they can inspect business premises but not wholly private premises (Sch 36 para 10 (2))
  • they may not be granted access to the premises and if that is the position they cannot force entry
  • if granted access to the business premises can only ask for and inspect the business records (and take copies); they are not entitled to search the premises for the business records.

The application to the tribunal must include the signature of an HMRC Authorised Officer (Sch 36 para 3(3)(a) notice to produce documents, para 12(2)(b) unannounced inspection); space is provided for this on the application form.

The decision maker should clearly set out HMRC’s reasons for concern about the customer’s business tax position and the reasons for the inspection being unannounced/the notice to produce documents or information being without notice and in private, for example the potential hiding or destruction of documents.

If the decision maker is relying on sensitive information or intelligence see ARTG4340, they must restrict themselves, both in the application and at the tribunal hearing, to saying that HMRC has information that leads it to believe, for example:

  • that the business is not registered for VAT but should be
  • that the customer is suppressing their takings in their accounts.

But they must not comment on the reliability of the information, other than to say that HMRC considers the information is sufficiently credible to want to make an unannounced inspection/see the business records - the visit will test the information.

The decision maker must not refer to the source of the sensitive information, and if pressed at any hearing should say that it is not in the public interest to be any more specific at this time, see ARTG8640. Nor must the decision maker involve the Intelligence Handler, in the hearing by way of giving witness evidence, either oral or written, at the tribunal.

In exceptional cases, if the decision maker has concerns that the application is not sufficiently specific to persuade a tribunal to approve the application then they should contact the National HumInt Centre (This content has been withheld because of exemptions in the Freedom of Information Act 2000) and ask for guidance on how to proceed, including whether a suitable form of words may be arrived at. This is not an appropriate option for most cases as it is resource intensive and generally will be a disproportionate step to take.

The decision maker should report the outcome of any application and any issues the tribunal raised to the Authorised Officer who signed the application.