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HMRC internal manual

Compliance Handbook

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HM Revenue & Customs
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Information & Inspection Powers: Information Notices: Third Party Notices: Groups: Notice to the parent about its subsidiaries

Some of the rules for a third party notice in CH23620, are different where the notice is issued to the parent undertaking for checking the tax position of more than one of its subsidiary undertakings, see CH23800.

The differences are

  • You do not need the approval of any of the subsidiaries or the tribunal.
  • You do not need to name the subsidiaries in the notice but if you don’t you must state in the notice that it is for the purpose of checking the tax position of more than one subsidiary.
  • You do not need to give a copy of the notice to any of the subsidiaries.
  • The parent has full appeal rights against the notice, see CH24360, rather than the more limited ‘unduly onerous to comply’ appeal right that normally applies to third party notices.

See also below the guidance on

  • tribunal approval - what to do if you do decide to seek tribunal approval, and
  • returns - when you need to have an open enquiry or a potential discovery position.

Tribunal approval

If you decide to seek tribunal approval for this type of notice, you must follow the guidance at CH24160, but

  • you do not need to name the subsidiaries in the notice but if you don’t you must state in the notice that it is for the purpose of checking the tax position of more than one subsidiary,
  • you do not need to give a copy of the notice to any of the subsidiaries
  • you do not need to give each subsidiary a summary of the reasons why you require the information or documents - but if you do, in no circumstances must you give the parent company a summary of reasons as it is a third party and disclosure would be a breach of taxpayer confidentiality.

There is no right of appeal against a tribunal approved notice.

Returns

If you are checking the

  • corporation tax position and any of the subsidiaries has made a CTSA return for the period concerned,
  • stamp duty land tax position and any of the subsidiaries has made an SDLT return for the transaction concerned,
  • annual tax on enveloped dwellings and any of the subsidiaries has made an ATED return, or
  • bank payroll tax return and any of the subsidiaries has made a bank payroll tax return,

you must

  • open an enquiry into the subsidiary’s return if the window is still open, or
  • have a potential discovery position, see the section headed ‘Self Assessment return’ in CH23520.

FA08/SCH36/PARA35 (4)

FA08/SCH36/PARA37