Information request was reasonable

The taxpayer was a clinical consultant who worked in the NHS and also in private practice. All his private consultancy fees were declared through his company GRI Research Laboratories Ltd.

During an enquiry into the taxpayer’s self assessment tax return HMRC requested details of his consultancy work completed for various named entities documents to show if consultancy fees had been declared through another entity and bank statements.

The taxpayer did not reply so HMRC issued a notice under FA 2008 Sch 36 requesting the information.

The taxpayer’s agent told HMRC that the consultancy fees had been declared through GRI and provided a breakdown of the fees received and a copy of the company return.

This resulted in HMRC finding discrepancies between the company turnover and the sums shown on the taxpayer’s bank accounts as well as a reduction in shareholder funds without corresponding dividends or salaries. The...