Introduction Background Note
31.Schedule 36 to FA 2008 contains a new set of information and inspection powers which apply in checking any person’s tax position in relation to income tax, CT, CGT and VAT. They came into force on 1 April 2009.
32.The main effect of this section and Schedule is to apply Schedule 36 to FA 2008 to many of the other taxes and duties administered by HMRC, from a date to be appointed. Once complete, this will be a major piece of modernised cross-tax legislation.
33.There are some information powers in a range of taxes that are not adequately covered by the existing powers in Schedule 36 to FA 2008. To address this it has been necessary to introduce the concept of an “involved third party”. This reflects the approach of existing law to persons who are neither taxpayers (first parties) nor conventional third parties such as banks. These persons are closely involved in a potentially taxable event or transaction and are currently required to provide information about that activity. In relation to these persons some of the normal rules that apply to third party information notices are relaxed and HMRC will be able to inspect the premises of such parties.
34.The amended Schedule 36 to FA 2008 also now contains an entry power for valuation purposes which brings together several existing powers into a single aligned power. The power to enter and inspect premises in Schedule 36 to FA 2008 only applies to business premises, but it is often necessary to value private premises or assets on such premises, e.g. for IHT, the valuation of all types of property is an essential form of check.
35.The valuation power introduced in Schedule 48 contains safeguards which go beyond those in current legislation. In particular, a valuation inspection can only be carried out with either the agreement of the relevant person (usually the occupier) or the tribunal. There is no facility to make an unannounced visit.