What Documents are Inland Revenue Entitled to See?
Originally sent: January 21, 2005Do you have to provide any information requested by your Tax Inspector, as long as it is not ?out of time?? If you received a demand by your Inspector to produce certain documents under the terms of Section 19A of the Taxes Management Act 1970, would you perhaps feel rather intimidated and believe you had no choice but to supply them?
On the face of it, the power Section 19A gives Inland Revenue is quite wide. It allows the Inspector to demand presentation of ?documents as are in the taxpayer?s possession or power and as the officer may reasonably require?. The context here is in relation to a tax return which is being queried by the Inspector.
Of course, a key word here is ?reasonably?. What is reasonable?
In a recent case, Inland Revenue felt it was reasonable to demand a taxi driver provide documentation relating to his personal expenditure. The implication was that they could use the evidence of his expenditure to assess whether he had fully disclosed all his income.
It is gratifying to note that even though the lowly taxpayer represented himself in this case, Inland Revenue lost. The Special Commissioners felt that, far from being reasonable, their demand was intrusive. The taxpayer was therefore not required to produce this evidence.
If you wish to read the details of the case, it is Taylor v Bratherton SPC448.
The moral is, don?t assume just because Inland Revenue quotes the law to you that their interpretation of the law is correct. Frequently it is not.
Adviser Breakthrough Training Solutions Ltd. takes no responsibility for loss occasioned by any person acting or refraining from action, or in consequence of any other person acting or refraining from action, as a result of the material in this article.
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