Mark McLaughlin looks at when documents held by third parties might be in a taxpayer’s ‘possession or power’.
It is not uncommon (e.g., during a tax return enquiry) for taxpayers to be issued with information notices requiring them to provide HM Revenue and Customs (HMRC) with information and documents ‘reasonably required’ to check the taxpayer’s tax position.
Too much to ask?
However, an information notice only requires a person to produce a document that is in the taxpayer’s ‘possession or power’ (FA 2008, Sch 36, para 18). There is a right to appeal against information notices (subject to exceptions) and against penalties for non-compliance.
HMRC considers that ‘possession’ means that the taxpayer has physical control over the document, irrespective of who the document belongs to.
