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HMRC internal manual

Enquiry Manual

From
HM Revenue & Customs
Updated
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Examining Accounts: Computer Generated Records: Possible Difficulties

The main areas in which you may encounter difficulties when requesting computerised records are described below.

If you are challenged by a taxpayer or their agents regarding our legal rights to request or examine electronic records, you should explain that FA08/S114 ensures that HMRC’s information powers, see CH20000 +, include records held on computer. This legislation means that HMRC has the right to examine any records that are reasonably required to check a tax position, irrespective of whether they are held as electronic records on computer or on paper.

For further guidance on how these powers apply to computer records, see EM2809.

Cost

The taxpayer may argue that the cost of providing electronic data is unreasonable. Some businesses choose to out-source their Information Technology requirements to an outside agency, which may be located outside of the UK, and pay the agency for this service. Other businesses may choose to retain this service in house. In either case, our rights to request information from the business remain the same.

HMRC cannot be influenced by data retrieval costs, especially where third parties maintain the records. Where charges from third parties are significant, this is regretted. However, to tailor requests to reflect this would disadvantage those businesses which have chosen to maintain the records in-house, where, of course, there will still be an effect on the business in time needed to process the request for data.

Businesses have to plan for requests for computerised records from HMRC, just as they have to with paper records. This includes retaining records for the appropriate statutory time limits.

Problems obtaining data from a system in a useable format

There will be occasions when something may have gone wrong with the system EM2812, or damage has occurred to back up material, or you may be unfamiliar with the system in operation. In these circumstances, you should obtain assistance from Data Handling Specialist or LBS Audit Specialists.