In RD Utilities v HMRC [2014] TC03440 a request for a Schedule 36 information notice was set aside by the tribunal because it was so poorly drafted that it was impossible for the parties to know whether it had been complied with.


Sch 36 information notice permits HMRC to:

  • make a written request (“an information notice”) for a taxpayer to provide information or a document,
  • if the information or document is reasonably required by the officer for the purpose of checking the taxpayer’s tax position.

The information notice included the following request:

“Constructive Obligation

a. Please specify for each year what the directors considered to be the pre-existing constructive obligations that arose to their suppliers, in doing this they should:

- explain precisely why they considered there was a constructive obligation

- what that constructive obligation was

- why discharging the constructive obligation would benefit their trade .

b. Do the lists provided with the resolution provided to the Trust provide the suppliers relevant to that year and, if not, how are the Trustees to know to whom payments are relevant? For each year please let me have a full list of the potential “providers”, a term used in the Trust deed to describe the class of beneficiary; the names, addresses, services provided, and the total amount paid to each provider by the company for their services” 

The Tribunal took the view that Information Notices should be expressed in clear terms and that it should be a straightforward matter for both parties to know whether an Information Notice has been complied with. It noted also that HMRC guidance states that an Information Notice should request facts and not opinion.

It concluded that it would be "fair and just to set aside the request for “information” in the Information Notice under paragraph 32 (3) (c) of Schedule 36 to the Finance Act 2008 because, in its view, information that it is impossible to supply cannot be “reasonably required” by HMRC.

This is possibly the first case of this nature. Information Notices may contain requests for many pieces of information: if a request is difficult to understand, makes no sense or requests an opinion it may not be, as in the above case, "reasonably required".

If an appeal of this nature is successful HMRC may of course simply redraft the request, so an appeal wastes time on both sides. When a notice is issued the taxpayer may appeal it straight away and then that should in theory give HMRC the chance to re-draft it.

Links: RD Utilities v HMRC [2014] TC03440