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HMRC internal manual

VAT Small and Medium Enterprises Assurance Manual

Introduction to assurance: disclosure of information about traders to third parties

HMRC has a strict legal duty of confidentiality in respect of the information held on our customers. Information we obtain about a taxpayer’s business affairs is to be treated in confidence. Our duty of confidentiality is contained at section 18(1) of the Commissioners of Revenue and Customs Act 2005 (CRCA) which states that we may not disclose information held by us in connection with a function of the department. However, may be disclosed if:

  • it is necessary for a function of the Revenue and Customs; or
  • we have the consent of each person to whom the information relates; or
  • there is a statutory gateway enabling us to disclose; or
  • a court order has been obtained that is binding on the Crown; or
  • it is in the public interest to disclose. Disclosure in the public interest can only be made in specific, limited circumstances set out in s20 CRCA, and can no longer be made using implied powers.

Section 19(1) CRCA makes it an offence to disclose confidential information without lawful authority and a criminal sanction may apply to any person who makes a wrongful disclosure (s19 (4) CRCA).

Agents dealing with HMRC on VAT matters have previously been authorised by their client using a specific “letter of authority to disclose” which was then scanned into EF. Guidance is contained within the Information Disclosure Guidance Manual.

Since the creation of the new Department, HMRC has brought together its procedures and guidance to give our customers a more professional, efficient and joined -up service. The main changes with regard to disclosure issues are;

  • launch of re-designed HMRC form 64-8 ‘Authorising your Agent’;
  • re-designed HMRC form 64-8 will replace the ‘letter of authority to disclose’ used for VAT by ex Customs & Excise (C&E) staff;
  • re-designed HMRC form 64-8 will enable agents to notify changes in trader’s particulars on their client’s behalf;
  • new procedures for handling 64-8 forms which contain VAT agent information; and
  • new guidance for scanning and accessing 64-8 forms on Electronic Folder (EF).

Form 64-8 was the agent authorisation for the former Inland Revenue (IR). It provided written evidence and authority from the trader to allow an agent to act on their behalf, and to allow the disclosure of confidential information to that nominated agent. The form is now being expanded to incorporate VAT and to enable agents to apply to act in a similar capacity for both direct and indirect taxes.

With effect from 1 September 2006, the use of the former C&E VAT ‘letter of authority’ will be discontinued and the revised HMRC form 64-8 will be used to notify HMRC of agent authorisations for direct tax and VAT. Where an agent begins to represent a client on VAT matters, the trader should complete and sign a form 64-8, which is available from the HMRC website.

The new re-designed form will provide an authority for HMRC to disclose issues to the authorised agent and to accept notification of changes from agents acting on their client’s behalf. We would, however, still require that VAT returns, VAT 1s, VAT 7s and other prescribed forms bear the signature of the taxable person. In addition, we need to introduce new procedures for processing the forms and scanning them to EF.

VAT ‘letters of authority to disclose’ have always been captured to EF but have not had a specific document type; they have been indexed against document type ‘TRLT’ (Trader Letter). The EF description field was annotated ‘Consent to disclose’ which differentiated it from a standard piece of correspondence. However, it has often been difficult and time consuming for those who needed access to these letters, i.e. Contact Centre staff, to find them quickly within EF.

Under the new arrangements, authorising an agent will be made easier for our customers, as the re-designed 64-8 is specifically intended for this purpose. In addition, new EF 64-8 index identifiers will make it easier to identify and access by HMRC staff.

Note - the letter of authority is not required if you are simply dealing with a third party. For example, you do not need the trader’s consent if an accountant is giving you information about a trader and no disclosure of trader information is being made by you.

The department has a particular duty of confidentiality to those businesses which are the subject of its enquiries. To this end, a trader visited for the purpose of obtaining information to be used in verifying VAT records of particular customers or suppliers should be provided with no indication that those businesses are under investigation.