Beta This part of GOV.UK is being rebuilt – find out what this means

HMRC internal manual

Claimant Compliance Manual

From
HM Revenue & Customs
Updated
, see all updates

Liaison: Third Party Contacts

Background

It is important to remember that in the majority of instances the onus is on the customer to provide any relevant information or evidence you require before a decision can be made. It is only when you cannot get the required information / evidence and are unable to make a defendable decision that you might consider contacting a third party. The instances where you need additional information will be rare. In most cases, you should have enough information to make a decision, bearing in mind our document verification checks and our access to various internal systems. In all cases, before approaching the third party you should consider if it is absolutely necessary to do so - will the information actually help you make your decision? Do you already hold enough information to make a decision?

You must try to obtain the information direct from the customer or from HMRC systems before contacting the third party. You should only contact third parties to request information specifically relating to tax credits, Child Benefit or Guardian’s Allowance claims, awards and entitlement where legislation allows it (This content has been withheld because of exemptions in the Freedom of Information Act 2000)  CCM3026(This content has been withheld because of exemptions in the Freedom of Information Act 2000) .

Any third party contact must be compliant with the Data Protection Act (DPA), so only request information that is necessary, relevant and proportionate. Before you contact a third party, consider what information you want to request. You must remember that you will be disclosing confidential details when requesting information from third parties. Remember to only disclose the minimum amount of information you need to.

What do we mean by necessary, relevant and proportionate?

Necessary

The main consideration is whether making this enquiry will enable you to make a decision on the claim. For example it would be unnecessary to ask an employer which days of the week the customer works if we were checking how many hours in total they work each week.

Relevant

This means the information you request must be in relation to the enquiry you are making. For example, it would not be appropriate to ask a childcare provider to tell you or confirm what work the parent is engaged in or where they work.

Proportionate

This means the information requested is no more than needed to accomplish your objective. For example, it would be unreasonable to ask a childcare provider for childcare payment details for the last three years if you only have reasonable doubt about increases in the current year’s childcare charges. The information you request from a third party must be in proportion to the circumstances you are trying to establish.

Tax Credits

There are powers in the Tax Credits Act that allow us to obtain information from prescribed third parties directly without permission from the customer. These are set out in the Regulations and are:-

  • the employer named by the customer (or by either customer in the case of a joint claim)
  • a person the Board has reasonable grounds for believing may be an employer of the customer (or of either customer in the case of a joint claim)
  • the childcare provider named by the customer (or by either customer in the case of a joint claim)
  • a person the Board has reasonable grounds for believing may be a person by whom childcare is provided to the customer (or to either of the customers in the case of a joint claim).

You can only ask for information about a customer that an employer or a childcare provider has obtained in connection to their business.

Child Benefit and Guardian’s Allowance

There is a legal gateway that provides for HMRC to request information relating to a claim for Child Benefit from the General Register Office.

Burden of proof

At the pre-award stage under s14 and for changes under s15 to increase the maximum rate of the award (for example adding a child), the burden of proof lies with the customer to provide sufficient information for us to make a decision on their award. If that information is not provided, we can draw an adverse conclusion.

Post award HMRC have already accepted the customer’s information and made a decision on the claim or entitlement for the year. If we now doubt that information, the burden of proof lies with HMRC to satisfy that doubt. If no further information is provided by the customer, that allows us to make a defendable decision, our decision to terminate or remove an element is less secure on the grounds of lack of evidence. We must be satisfied that our doubts are based on good reason.

The burden of proof again shifts back to the customer before making our conclusive s18 decision on entitlement for a tax year after the s17 renewal notice has been issued. Please bear in mind that we must be able to defend all our decisions at an appeals tribunal. But this does not mean it is necessary to obtain every piece of evidence or information that it is possible to obtain.

Asking for information from third parties

Other than those outlined in tax credits legislation you should not contact third parties as a matter of routine. In all cases, before approaching the third party you should consider if it is absolutely necessary to do so - will the information actually help with the enquiry? Do you already hold enough information to make a decision?

Note: You must only request information by phone, letter or fax. You must not request information by e-mail. This is because we cannot assure security for information contained in the e-mail outside of the Government Secure Intranet (GSi) network.

Document verification

If you have a reasonable doubt that a document sent in by the customer is genuine, you can contact the third party who issued it. Only ask the third party to confirm the document is genuine and no more. Only disclose enough information about the customer and their family that is necessary for the third party to be able to identify them and respond to your query. You do not need permission from the customer to contact the third party who issued the document to check that it is genuine.

Permission Form

A customer must complete this form giving their explicit permission for a third party to disclose information to us. (This content has been withheld because of exemptions in the Freedom of Information Act 2000) CCM3026(This content has been withheld because of exemptions in the Freedom of Information Act 2000) For any other third party contact, you will need to have a signed permission form from the customer.

If you need permission from the customer to contact a third party please ask them to complete permission form B&C3 found on SEES. You will need to add household note UZ78.

The permission form should let the customer know who you want to contact and they should be left in no doubt as to what they are giving their permission for. If the customer gives their permission they should be able to withdraw their permission as easily as they gave it. The third party has the right to ask for and see the permission form before they respond to our request.

Note: You cannot draw an adverse conclusion on the basis the customer refuses to give HMRC permission to contact a third party, they may have good grounds for refusing. You will need to make a decision based on the evidence you already hold.

Third Parties who charge for information

Third parties may charge either HMRC or the customer to respond to our requests for information or they may refuse to respond. HMRC will not pay the third party for the information or reimburse the customer if they are charged for information.

When can you contact third parties?

You can contact third parties if:

  • you have strong reason to believe that the information the customer has provided is incorrect

and

  • you have checked all other available information sources

and

  • you need supporting evidence/information to determine entitlement to the award.

(This content has been withheld because of exemptions in the Freedom of Information Act 2000) (This content has been withheld because of exemptions in the Freedom of Information Act 2000) CCM3026(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

It is important that you keep a record of the reasons why you need to contact the third party, how you contact them and what the response was. This is important for audit / security purposes or possible challenges to our decision in the future. This will give assurance that we are compliant with DPA and mitigate some of the general risk of contacting third parties.

You must not, under any circumstances, impersonate a customer and access information on their behalf. You may assist the customer by advising them where and how to get the information you require.

Under DPA the third party is not obliged to respond to our enquiries. Many organisations will have their own disclosure legislation. We need to make it clear what information we are asking them to provide so that they can make an informed decision about whether to share their information with HMRC.

What you should do if the third party provides inaccurate information?

You need to be satisfied that any information provided by a third party comes from a valid and reliable source. If following your decision you discover that the information provided by the third party is incorrect, you will need to consider changing your decision under Official Error regulations. These regulations state we can only change the decision when:-

  • the decision was incorrect due to official error
  • the new decision will be in the customer’s favour
  • the customer has not materially contributed to the error.