In Qubic Tax and others v HMRC [2020] TC7701, HMRC successfully made information requests on tax advisers selling and engaging in tax avoidance schemes in order to check on commission payments made to introducers and the validity of the tax schemes.

HMRC's anti-avoidance units, as part of their enquiries into Disclosure of Tax Avoidance Schemes  (DOTAS) and their Promoters of Tax Avoidance Schemes, opened enquries into the companies, and as a result, issued Information Notices.

1. Qubic Tax Ltd received Schedule 23 Data-Holder Notices covering the years 2013-2014 to 2016-17. HMRC requested details of the company's sales, debtors and amounts of commission paid to other accounting and tax firms who referred their clients to Qubic.

2. Qubic Trustees and Orchard Street Service Co Ltd received Schedule 36 FA 2008 Information Notices requesting their accounting records.

3. Assethound Ltd's information notices concerned its own Employers Benefit Trust and gold bullion scheme that was designed by Qubic to reward the owner of both companies.

  • The taxpayers all appealed against notices on the basis that the notices were all unclear and overly onerous to comply with.
  • Qubic Tax, as an Institute of Chartered Accountants in England and Wales (ICAEW) member firm, stated that it could not disclose client data and that the information required in 1. and 2. were tax advice and not disclosable.
  • In the case of Assethound, it was claimed that the notice requested information already subject to a tax appeal and further enquiry.

The First Tier Tribunal (FTT) dismissed all the appeals after deciding that the information requested either consisted of statutory records, for which there is no appeal, or that the information was in fact reasonably required to check the taxpayers' position.

HMRC had also issued penalties for non-compliance in respect of the notices. The FTT dismissed these: the notices had been issued after the company had appealed the notices. 

Useful guides on this topic

HMRC's information powers: At a glance
A client briefing: during the course of an enquiry HMRC will gather information on taxpayers using its wide ranging information powers. 

Disclosure of Tax Avoidance Schemes  (DOTAS)
What are rules on Disclosure of tax avoidance schemes (DOTAS)? When should you disclose your use of a tax avoidance scheme? What are the consequences of non-disclosure? How are penalties calculated?

Promoters of Tax Avoidance Schemes
Who is a Promoter? What are the Promoters of Tax Avoidance Scheme rules?  What does this mean for promoters, intermediaries and clients?

Schedule 36 FA 2008 Information Notices
What is a Schedule 36 Information Notice? When can HMRC issue one? What rights does the taxpayer have when an information notice is issued?

Schedule 23 Data-Holder Notices
Who is a data holder and what information may HMRC request from them? 

External link

Qubic Tax Ltd, Assethound Ltd, Orchard Street Service Co Ltd, Qubic Trustees Ltd TC7701