HMRC entitled to approach employee before employer

The taxpayer was employed by a company that HMRC suspected had offered employees the opportunity to participate in a disguised remuneration scheme under which they were paid a minimum wage and then received a further payment from which tax was not deducted. HMRC issued the taxpayer with an information notice (FA 2008 Sch 36) requiring details about the arrangements.

The taxpayer appealed saying HMRC was not checking his tax position and had no real intention of doing so. The information was not therefore reasonably required. He said HMRC should approach the employer for the information.

HMRC issued the notice under its early interventions project the aim of which is to educate individuals about potential avoidance schemes and warn them against using them. In essence HMRC wished to find out if the taxpayer was using an avoidance scheme and how he had benefited from it.

HMRC said the information...