Whether a firm of solicitors is a data holder

HMRC issued the taxpayer Wilsons Solicitors an information notice under FA 2011 Sch 23 para 1 demanding details of clients who were seeking its advice on offshore financial structures. The notice defined the partnership as a relevant data holder within the schedule.

It was agreed that the taxpayer was required by the Money Laundering Regulations (MLR) to keep for each client copies of documents proving their identity and the purpose of the business relationship. But the taxpayer said it was not a data holder for Sch 23.

It was noted that HMRC had served similar notices on nine other firms of solicitors and was treating the exercise as a test run with a view to serving similar notices on many more practices in the future. Seven firms had complied one had made a nil return which HMRC accepted and another had successfully appealed to...