Obtaining information and documents
23.Section 254 defines “monitored proposals” and “monitored arrangements” for the purposes of the information requirements that apply to monitored promoters. Monitored proposals and arrangements are those where certain actions take place after the date that the monitoring notice comes into effect. For example subsection (1) (a) defines monitored proposals as proposals for which the promoter makes a firm approach to another person after the date that the monitoring notice took effect. Subsection (2) defines monitored arrangements and includes arrangements which may have been entered into before the date that the monitoring notice takes effect but where the tax advantage generated arises on or after the date that the monitoring notice took effect (subsection (2) (c)).
24.Section 255 is the targeted information power for monitored promoters and relevant intermediaries. It is to be operated by, or with the approval of, authorised HMRC officers only and applies only if the information or documents are requested in writing. The information or documents requested must be reasonably required to meet certain purposes, specified in subsection (3), which includes considering the tax consequences of implementing a monitored proposal and to check the “tax position” of any person who is reasonably believed to have implemented monitored proposals or monitored arrangements. Only intermediaries who, having been notified of the promoter’s reference number, continue to communicate the promoter’s proposals are subject to the information requirement (subsection (4)). “Tax position” is widely defined in subsections (6) and (7). The time limit for providing the information or documents is a minimum of ten days but may be longer as directed by the officer giving the notice (subsection (10)).
25.If an HMRC officer wishes to use section 255 to obtain information which relates to a person other than a monitored promoter, their intermediary, or a subsidiary undertaking of either, section 256 requires the officer to obtain prior approval of the Tribunal. This is similar to paragraph 3 of Schedule 36 to Finance Act 2008.
26.Section 257 provides for the ongoing duty of the monitored promoter to provide information to HMRC. It takes effect once HMRC has notified the monitored promoter. This enables HMRC to obtain information about all monitored proposals and monitored arrangements that were in existence at the time the monitoring notice comes into effect and throughout the period that the promoter is monitored. Unlike DOTAS, which relies on identifying proposals or arrangements using hallmarks, this power is not limited to specific proposals or arrangements. The time limit for provision of the information and documents is variable and will be specified in the notification from HMRC. The information and documents to be provided under this duty will be detailed in secondary legislation.
27.If the monitored promoter is offshore and has failed to provide the information required under sections 255 and 257 about monitored proposals or monitored arrangements then HMRC may approach an intermediary to provide the information under section 258. In the absence of an intermediary then HMRC may require the person who has implemented the monitored proposal or all or part of the monitored arrangements to provide the information. The minimum period for the provision of the information is ten days.
28.Section 259 is concerned with the provision of information about the clients of the monitored promoter. HMRC may serve a notice under this section, after which time the monitored promoter has to make returns supplying names and addresses for its clients (as well as other prescribed information) on a calendar quarterly basis. The first return must contain details about current clients, and thereafter there is an on-going duty to file returns with details of new clients. The clients are those to whom the promoter has made a firm approach, made a relevant proposal available for implementation or those in relation to whom the promoter has taken part in the organisation or management of relevant arrangements. Clients that are entering into transactions for arrangements that the promoter has previously promoted are included in the information requirement if the tax advantage arises in a relevant period (subsection (8)). The information provided by the monitored promoter can be cross-checked against its client’s returns and notifications to HMRC for compliance purposes. Once the HMRC notice has been issued the duty to make returns continues until the promoter is no longer monitored.
29.Section 260 is the equivalent provision for intermediaries. HMRC may issue a notice to the intermediary requesting details of its clients in relation to a monitored proposal of the monitored promoter for a relevant period. The relevant period cannot begin before the intermediary received the promoter reference number (subsection (3)) and comes to an end once the monitoring notice ceases to have effect for that promoter. The intermediary has to provide the names and addresses (and other prescribed information) of the clients to whom it communicated information about the monitored proposal on an ongoing basis for each relevant period.
30.Section 261 only applies where a client return has been provided under section 259 or 260 and an authorised officer suspects that a person not included in the return is party to transactions implementing a proposal or arrangement. In these circumstances the officer can require the monitored promoter to provide prescribed information about that person. This will allow the officer to confirm or dismiss relevant suspicions. The minimum time for the provision of the information is ten days.
31.Section 262 applies to promoters who are subject to a conduct notice. The section allows HMRC to request information or documents that are reasonably required to enable HMRC to monitor the conduct notice. Any information or documents provided under section 262 may provide evidence to support the amendment or withdrawal of the conduct notice.
32.Section 263 places an obligation on the monitored promoter to inform an authorised officer of its current address within 30 days of the end of each calendar quarter for the period that the monitoring notice has effect.
33.If a promoter provides information under sections 255, or 257 to 262, but an authorised officer suspects that not all of the information or documents have been provided then section 264 enables the authorised officer to apply to the Tribunal for an order requiring the promoter to provide specified information or documents. The Tribunal needs to be satisfied that the authorised officer has reasonable grounds for suspecting that the information or documents are reasonably required or will support or explain information already required. The time limit for the provision of the information or documents is ten days or any longer period as the authorised officer directs.
34.Section 265 is equivalent to a similar DOTAS provision requiring a client to provide the promoter with their national insurance number and unique taxpayer reference. This will enable the promoter to provide this information to an authorised officer if required to do so under section 259 and will assist HMRC in tracking the promoter’s clients.
