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HMRC internal manual

Compliance Handbook

Information & Inspection Powers: Conditions and safeguards: Commencement date

Information and inspection powers in Schedule 36 FA 2008
Information and inspection powers for excise

Information and inspection powers in Schedule 36 FA 2008

The information and inspection powers in Schedule 36 FA 2008 apply from 1 April 2009 to

  • income tax (including employers’ obligations to deduct and account for PAYE & NIC)
  • National Insurance contributions
  • deductions under the Construction Industry Scheme
  • capital gains tax
  • corporation tax
  • VAT

and from 1 April 2010 for

  • insurance premium tax
  • inheritance tax
  • stamp duty land tax
  • stamp duty reserve tax
  • petroleum revenue tax
  • aggregates levy
  • climate change levy
  • landfill tax

and from

  • 31 August 2010 the powers can also be used to check bank payroll tax, and
  • 1 April 2013 the powers can be used to check annual tax on enveloped dwellings.

Once the Schedule 36 powers apply, you must use them even if your compliance check started before they applied. You cannot use any of the powers it replaces. They cease once Schedule 36 applies. CH21060 contains a list of the powers replaced by the powers in Schedule 36. Not all the previous powers have been repealed. CH21070 explains what to do if there is a power under Schedule 36 and other legislation.

There are transitional provisions. They apply to notices issued before the Schedule 36 powers apply but which the person fails to comply with after the Schedule 36 powers apply. Further guidance is at CH21080.

You must be clear about the legislation under which you are acting. You should be able to explain to the person whose affairs you are checking the legal basis on which you have reached your decision to ask for the information or conduct the inspection.

Where you started your compliance check before Schedule 36 applied,

  • in the period beforehand you should not delay or advance informal requests, the issue of information notices or inspection visits simply to benefit from or avoid the disciplines imposed by Schedule 36
  • in the period afterwards you should use the Schedule 36 power that is appropriate to the circumstances of the particular compliance check, subject to the conditions contained in CH21300 to CH22340, but
  • you must not use a particular power in Schedule 36 to seek information or documents that you were in a position to seek (see below) from that person before Schedule 36 applied if

    • either there was no corresponding power before that date
    • or the corresponding power could not have been so used.

“In a position to seek” means that you would have used the Schedule 36 power had it been in force at the time.

For example

You opened an income tax enquiry before 1 April 2009 and wanted to visit the business premises to get a feel for the nature and scale of the business as well as to examine the business records. The person did not co-operate so you could only use the available information power (TMA70/S19A) to require production of the business records and get a written description of the nature and scale of the business. The person sent the written description and produced the records at the adviser’s premises so you did not get to visit the person’s premises. If the enquiry continues after 1 April 2009, you cannot use the inspection power to go and do what you could not have done when the need to do it first arose.

In the same income tax enquiry, a dispute arises after 1 April 2009 about whether an asset is ‘plant’ for capital allowance purposes. If the need to enter the premises and inspect the business asset had arisen before 1 April 2009 there would be no power to do it. But as the need arises after 1 April 2009 you can use the inspection power in paragraph 10.

Also after 1 April 2009 you find that you need to see other records that are part of the person’s statutory records, see CH21700. You could issue an information notice requiring production of the record or could carry out an inspection visit to see it. Normally you would use the more familiar information power rather than the newly-acquired inspection power in such a situation.

The person receiving the information notice may comply with it by producing the statutory records at the business premises for you to examine. There is hardly any difference in the practical outcome of using an information notice instead of an inspection but the means of achieving it are very different.

Information and inspection powers for excise

The inspection powers in Schedule 36 do not apply to excise checks on revenue traders. For excise checks you follow the full guidance about excise inspections in the Criminal Justice Procedure (CJP) and you do not use any of the powers in CH25000+.

For information powers for excise, see the powers described in the Criminal Justice Procedure (CJP) unless you need to use an excise information notice under CEMA79/S118BA.

Section 118BA of CEMA provides for an excise information notice to be issued to any person. The purpose is to obtain documents and/or information from a third party, that is, not a ‘revenue trader’ as defined in CEMA to control excise goods. Limited provisions from Schedule 36 apply to excise information notices from 1 April 2011. See CH22500.