Schedule 36 notices are not reasonable

Mr Davies and Ms Mahil - husband and wife - operated a property investment partnership. In May 2019 HMRC opened an enquiry into their 2017-18 tax returns. The letter notifying the enquiry requested 21 pieces of information.

In February 2020 HMRC issued formal Sch 36 information notices for the documents. The taxpayers appealed.

The First-tier Tribunal said it was for HMRC to satisfy that the information is reasonably required for the purpose of checking the taxpayer’s position. In this instance HMRC had to have reason to suspect that an amount that should have been taxed had not been assessed. In this case while HMRC had a reason to suspect an underassessment the question remained – was the information requested reasonably required. The tribunal decided it was not. This was because the various documents would have been ‘very onerous’ to provide and would not necessarily give HMRC...