Mark McLaughlin warns that taxpayers may be required to provide HMRC with documents not physically held.
Taxpayers are sometimes issued with information notices requiring them to provide HM Revenue and Customs (HMRC) with information and documents ‘reasonably required’ to check the taxpayer’s tax position (or to collect a taxpayer’s tax debt).
‘Possession or power’?
However, there are various restrictions on HMRC’s powers. One such restriction is that HMRC can only require the taxpayer to produce a document if it is in their ‘possession or power’.
This test has two alternative limbs. For example, an individual’s personal bank statements for the tax year 2020/21 should be in their ‘possession’ or ‘power’; even if they don’t possess paper