Lawfulness of an informal investigation by HMRC

The taxpayer Mr R one of six claimants was UK resident and domiciled and operated supermarket businesses in Spain and Portugal. In June 2016 HMRC began an investigation into his tax affairs although confirmed it had not opened an enquiry under TMA 1970 s 9A. It made informal requests for information saying if this was not provided it would have to issue formal notices under FA 2008 Sch 36. It also contacted the Spanish and Portuguese tax authorities for information.

Mr R said the investigation caused him enormous stress and he felt he had been treated like a criminal. He applied for judicial review challenging the lawfulness of HMRC’s investigation.

On Mr R’s first ground that there was no lawful basis for the investigation the High Court said HMRC’s primary function was the collection of tax. To ensure people paid the correct...