In Jupiter Online Limited v HMRC TC7281 the FTT confirmed that HMRC may use an information notice to check how a company operates when checking its tax position.
- The Company’s business is registered at Companies House as ‘accounting and auditing activities’.
- Two of its directors Mark Turner and Tina Ban’dyle, were involved with UK entities that were promoting and operating known tax avoidance schemes such as variations on disguised remuneration loans including Choice Premier, Keypay, Kinsella and Runnymede Services: all of these are under investigation by HMRC.
- The company’s sales turnover £4,688,902 was offset by purchases of £4,688,902 and corporation tax due was £nil.
- HMRC sought detailed information in order to understand the business made and verify the accuracy of its returns and determine whether its self-assessments are correct.
- It issued detailed Schedule 36 Information notices which requested amongst other things full details of the accounting records, breakdown of sales and purchases and details of associated entities.
- The company appealed against the notices on the basis that not all the information was reasonable required for checking its tax position.
The FTT dismissed the appeal. It found that HMRC are entitled to check how the Company operates, who the Company customers are, the nature of the services provided and what involvement it has with other entities both on and off-shore.
Our useful guides
Sch 36 information notices (subscriber version)
What is a Schedule 36 Information Notice? When can HMRC issue one? What rights does the taxpayer have when an information notice is issued?
How to appeal an HMRC decision
What type of a decisions are appealable? What are your different options when you disagree with HMRC? What are the key steps in making an appeal?