On how many occasions have accountants been told by clients that they “thought it best just to give HMRC a quick call and clarify the matter” and save you, the accountant, and the trouble!!
I think this will have happened too many over the years and the problem then arises that you don’t really know what question was asked or statement made by your client and more importantly how it has been interpreted by HMRC.
In many cases the result of the conversation may have no real effect but on occasion it could become material to an investigation or on-going correspondence/dispute with HMRC. Furthermore HMRC may not be very forthcoming in providing details of the conversation and its interpretation of the information given even though a file note will have been made.
However a little known way of getting information from HMRC is using the 1998 Data Protection Act (DPA) via a Subject Access Request (SAR).
The DPA imposes a duty on any organisation that holds personal data on individuals to respond to requests by the individual concerned to see the information held about them. Using SARs, this client had obtained recordings of phone conversations they had had with HMRC officials and written notes of other unrecorded conversations.
In order to make a SAR, you need to write to HMRC or any organisation concerned, specifying exactly what information you want. Organisations are entitled to charge a fee of up to £10 (£50 in the case of paper-based health or education records) for complying with each SAR, so it is important to ensure you make the first one as comprehensive as you can.
If you do not get a response within 40 days, you can complain to the Information Commissioner’s Office (their website is at http://www.ico.gov.uk/ ).
As with most legislation there are some exemptions from complying with SARs. In the case of HMRC this would include any SAR if it would ‘prejudice the assessment or collection of tax’. Using this HMRC could probably refuse to tell you their reasons for investigating your affairs while the investigation was on going, but they are not exempt from disclosing such things as notes of telephone conversations they have had with you.
In some cases you will need to consider making the request under the Freedom of Information Act 2000. This act applies to ‘unstructured’ information – that is, information not held in a file or ‘partly organised’ material, such as a paper file kept in date order. These days, most information held by HMRC is likely to be ‘structured’ and so the Data Protection Act is more likely to be the relevant legislation.
This legislation should not be used lightly but in certain cases it may prove the way forward in resolving issues particularly in cases where your client has been given incorrect information over the phone, that led to them taking action in good faith that they would otherwise avoided.
For any further information on any of the issues outlined in this piece, please call the Advice Service on 01455 852555.