Finance Act 2021

Tax checks

5 (1) For the purposes of this Schedule a person undertakes a “tax check” in relation to an authorised activity by doing the following in accordance with arrangements made pursuant to paragraph 4(1)(a)—

(a) giving HMRC such information as HMRC may reasonably request in order to be satisfied that the person has complied with any obligation of the person to give a notice of liability in respect of the relevant period,

(b) if the person has delivered a tax return to HMRC in respect of the relevant period, confirming to HMRC whether or not the return included information relating to relevant authorised activity income, and

(c) giving HMRC such information as HMRC may reasonably request in order to assess the effectiveness of this Schedule in improving the tax compliance of persons carrying on authorised activities.

(2) The information that HMRC may request a person to give under sub-paragraph (1)(a) and (c) includes, in particular—

(a) the person’s name and other information enabling the person to be identified (such as an individual’s or company’s Unique Taxpayer Reference, an individual’s date of birth or national insurance number, or a company’s registered number);

(b) the authorised activity in respect of which the person has applied, or proposes to apply, for authorisation (“the authorised activity”);

(c) information about the person’s existing or previous authorisations in respect of the authorised activity or authorised activities in the same category as that activity (such as length or date of expiry).

(3) A tax check undertaken by a person in relation to an authorised activity—

(a) is “initiated” on the earlier of—

(i) the first day on which HMRC receive any information in response to a request under sub-paragraph (1)(a) and (c), and

(ii) in a case in which the person is required to give the confirmation mentioned in sub-paragraph (1)(b), the day on which HMRC receive that confirmation;

(b) is “completed” on the day on which HMRC indicates to the person that they are satisfied that they have received—

(i) all of the information requested under sub-paragraph (1)(a) and (c), and

(ii) in a case in which the person is required to give the confirmation mentioned in sub-paragraph (1)(b), that confirmation.

(4) In this paragraph—

• “notice of liability” means—

  (a)

  a notice under section 7 of TMA 1970 (notice of liability to income tax), or

  (b)

  a notice under paragraph 2 of Schedule 18 to FA 1998 (duty to give notice of chargeability to corporation tax);

• “relevant authorised activity income” means income that arose from the authorised activity or an authorised activity in the same category as that activity;

• “the relevant period” means—

  (a)

  in relation to a notice of liability or tax return under TMA 1970, the most recent tax year to have ended 6 months or more before the day on which the tax check is initiated;

  (b)

  in relation to a notice of liability or tax return under Schedule 18 to FA 1998, the most recent accounting period of the company to have ended 12 months or more before the day on which the tax check is initiated;

• “tax return” means—

  (a)

  a return required to be made under section 8 of TMA 1970 (personal return), or

  (b)

  a return required to be made under paragraph 3 of Schedule 18 to FA 1998 (company tax return).