Mr Sangha appeals against an information notice (the Notice) issued by HMRC under Schedule 36 to the Finance Act 2008 (FA 2008) on 13 October 2021, and varied by HMRC on 4 February 2022 following a review. Mr Sangha disputes all the items in the Notice.

I have set aside some of the items in the Notice and varied others. The remaining items in the Notice, as varied, are set out in the Appendix to this decision.

The hearing was conducted by video link on the tribunal’s Video Hearing Service. Prior notice of the hearing had been published on the gov.uk website, with information about how representatives of the media or members of the public could apply to join the hearing remotely to observe the proceedings. As such, the hearing was held in public. 

The documents to which I was referred were a 231-page hearing bundle, a 466-page authorities bundle, HMRC’s statement of case, and both parties’ skeleton arguments. I had witness statements from Mr Sangha and from HMRC’s witness, Officer Alastair Andrews. Both witnesses attended the hearing but neither were cross-examined.

Prior to the hearing I had been provided with an incomplete version of the bundle, which did not include Officer Andrews’ witness statement. The complete version was emailed to me, at my request, at the start of the hearing. On reviewing Officer Andrews’ statement after the hearing, I formed the view that the bundle was still incomplete. This was because his witness statement contains a section headed “letters and paperwork referred to in statement”, which lists a number of documents referred to by Officer Andrews in his statement. However, several of these documents were not in the bundle.

I considered whether I should ask HMRC to resubmit the witness statement with these additional documents, and then invite further submissions from Mr Sangha. I decided that this would not be proportionate. The additional documents could significantly alter the case which Mr Sangha has to answer, meaning that it was likely that there would need to be a further hearing. This would incur costs and involve delay. Moreover, HMRC had ample opportunity to provide the Tribunal with the evidence required to support their case: Mr Sangha’s representatives had drawn attention, in their skeleton argument, to a number of areas in which HMRC’s case appeared to be lacking in evidence.

I have therefore made my decision on the basis of the parties’ submissions and the evidence in the bundle that was provided to me in the hearing, with the addition of the witness statement from Officer O’Neil which I describe below.

An issue arose during the hearing as to whether the witnesses, Mr Sangha and Officer Andrews, would be cross-examined. Mr Williams said that he would like to cross-examine Mr Sangha. Mr Jones said that Mr Sangha had not expected to be cross-examined and did not have a copy of the document bundle to refer to.

I asked Mr Williams to tell me the questions he would seek to put to Mr Sangha in cross-examination, so that I could determine whether these were properly directed to the issue that was the subject of the appeal, namely the validity of the information notice.

Having heard all the questions Mr Williams wanted to ask Mr Sangha, I took time to consider the matter. I was satisfied that the questions were designed to elicit further information about Mr Sangha’s tax position, rather than being concerned with the validity of the information notice. The information Mr Williams sought may have properly been the subject of an enquiry or an information notice, but the purpose of the hearing was not to permit HMRC to conduct an on-the-spot enquiry.

I therefore decided not to allow Mr Williams to put his questions to Mr Sangha in cross-examination. Mr Jones said that if Mr Williams did not cross-examine Mr Sangha, he would not seek to cross-examine Officer Andrews. Therefore neither witness was cross-examined.

A further case management issue arose towards the end of the hearing. Some of the documents sought by HMRC were more than six years old at the time of the issue of the Notice and so, under FA 2008, Sch 36, para 20, the Notice required the agreement of an “authorised officer”.

Officer Andrews stated, in his witness statement, that the notice had been approved by an authorised officer, Officer O’Neil, on 6 October 2021. Mr Jones did not challenge this statement in cross-examination, but submitted that it was a mere assertion and that there was no other evidence in the bundle that the necessary approval had been received. Mr Williams said that he had a chain of emails between Officer Andrews and Officer O’Neil which demonstrated that the approval had been received, and asked for permission to produce this email chain to the Tribunal. Mr Jones objected to the emails being adduced as evidence. I said that I would address this matter in directions after the hearing.

After the hearing, on 25 March 2024, I issued directions to the parties, directing HMRC to serve a witness statement from Officer O’Neil or such other evidence as HMRC may wish to advance to demonstrate HMRC’s compliance with the requirements of paragraph 20, and inviting Mr Sangha’s written observations on this evidence. In my directions, I informed the parties that I was not minded to refuse to admit evidence of the fulfilment of a procedural requirement by HMRC, in circumstances where it was within HMRC’s power to cure any procedural irregularity, issue a fresh information notice, and restart the course of this dispute, but at the cost of a significant further delay. If Mr Sangha disagreed, I invited him to express this in his written observations.

It is unarguable that, if HMRC could not show that the Notice had been approved by an authorised officer, the Notice could not require the production of any documents that were more than six years old at the time of the issue of the Notice. However, if HMRC could show approval by an authorised officer, I did not consider that they should be prevented from obtaining these documents simply because the only evidence put forward at the hearing was Officer Andrews’ assertion in his witness statement.

In accordance with these directions, I received a witness statement from Officer O’Neil, dated 3 April 2024, stating that he held the role of authorised officer and that he approved the Notice on 6 October 2021. Mr Jones objected to the production of the witness statement on several grounds, but I have decided to admit it, for the reasons that follow.

In his post-hearing written submissions, Mr Jones said that it was procedurally irregular for a judge to direct a party to adduce additional evidence to improve its case, and that this is capable of being characterised as apparent bias.

I do not accept this submission. Officer Andrews had already given evidence, in his witness statement, that the requirement was satisfied. That statement was not challenged in cross-examination but, having heard Mr Jones’s submissions that the statement was insufficient, HMRC asked to adduce further evidence in the form of a chain of emails. This was a video hearing so it was not possible for this evidence to be handed up as might have happened at a face-to-face hearing. After the hearing I decided that I would prefer to receive this evidence by directing the production of a witness statement, as I am entitled to do under Rule 15(1)(e)(ii) of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009. In my view a witness statement would be a more reliable form of evidence of the relevant facts than a chain of emails.

Mr Jones further submitted that I had erred by describing paragraph 20 as a “procedural requirement” when, according to Mr Jones, it is a substantive requirement or condition precedent. I do not consider there is anything in this point: as with any statutory requirement, paragraph 20 must be complied with. Describing paragraph 20 as a procedural requirement does not change what must be done to comply with it.

I also do not accept another submission from Mr Jones, that the only reason I directed the production of the witness statement was that I was not satisfied on the other evidence that the requirements of paragraph 20 had been met. As is common practice in the Tribunal, I reserved my decision at the end of the hearing so that I could reflect on the evidence before reaching my conclusions. I directed the production of the witness statement in response to HMRC’s request to adduce additional evidence that paragraph 20 had been complied with. I then formed my view of the entirety of the evidence, including the statements of Officer Andrews and Officer O’Neil. Having done so I have reached my decision, as set out below.

On 26 January 2018, Officer Andrews opened an enquiry under section 9A of the Taxes Management Act 1970 (TMA 1970) into Mr Sangha’s tax return for the year 2015-16. This tax return had been submitted on 31 January 2017. The enquiry opening letter stated that Officer Andrews would be checking that the return was complete and correct.

On 13 June 2018, Officer Andrews opened an enquiry under TMA 1970, s 9A into Mr Sangha’s tax return for the year 2016-17. This tax return had been submitted on 31 January 2018. The enquiry opening letter stated that Officer Andrews would be checking Mr Sangha’s income from property and directorships. Officer Andrews also stated that he may need to extend the check, but that if this happened he would let Mr Sangha know.

Officer Andrews issued a number of information notices under FA 2008, Sch 36 to Mr Sangha in connection with these enquiries. The Notice that is the subject of this dispute was issued on 13 October 2021.

I accept the evidence of Officer Andrews and Officer O’Neil, referred to above, and find as a fact that to the extent that the Notice required the production of documents that were more than six years old, the Notice was given with the approval of an authorised officer within the meaning of FA 2008, Sch 36, para 20.

Mr Sangha requested a review of the Notice by an independent HMRC officer. The HMRC officer who conducted this review amended the Notice, removing some items from it. The amended Notice was issued on 4 February 2022. Mr Sangha submitted an appeal against the Notice on 23 February 2022.

It was initially HMRC’s case that on 23 December 2020, Officer Andrews opened an enquiry into Mr Sangha’s tax return for the year 2018-19. However, unlike for the years 2015-16 and 2016-17, I was not provided with a copy of the letter under which Officer Andrews opened this enquiry.

I asked Mr Williams what evidence there was in the bundle that this enquiry had been opened, and he said there was none. Unlike the question (discussed earlier in this decision) as to whether the approval of an authorised officer had been sought for the purposes of FA 2008, Sch 36, para 20, Mr Williams did not seek to adduce any additional evidence on this point at the hearing. I therefore took HMRC not to be pursuing the point that there was an open enquiry into Mr Sangha’s tax return for 2018-19.

The information received by Officer Andrews in the course of his enquiries, including information provided by Mr Sangha’s agents, led him to identify a number of areas in respect of which he considered that taxable income or gains could have been omitted from Mr Sangha’s returns. The information and documents sought by the Notice were intended to assist Officer Andrews in his enquires into these possible missing sources of income and gains.

The Notice refers to a number of companies in which Mr Sangha has, or is alleged to have had, an involvement. There are very few agreed facts about Mr Sangha’s involvement with these companies. I have set out below such findings of fact as I have been able to make, based principally on Mr Sangha’s witness statement, and in some cases on correspondence from Mr Sangha’s agent at the relevant time.

I have supplemented these findings of fact with some further information from Officer Andrews’ witness statement, where he has explained his understanding of the position based on correspondence with Mr Sangha’s agents. Where Officer Andrews’ understanding is based on correspondence which has not been provided to the Tribunal, I do not adopt this as my own finding of fact, but set it out to provide context to the information and documents sought in the Notice.

Mr Sangha was previously a director of a company based in Hong Kong, known as Evolution Drinks Hong Kong Ltd (“Evolution Drinks”). Evolution Drinks was wound up, or “de-registered”, in March 2017.

In a letter dated 21 October 2019, Mr Sangha’s previous agent informed Officer Andrews that Mr Sangha was previously also the sole shareholder in Evolution Drinks. I had no submissions or evidence to the contrary so find this to be established as a fact.

In the Notice, Officer Andrews requested bank statements and accounts for Evolution Drinks to ascertain whether these would affect Mr Sangha’s tax position.

Mr Sangha held shares in a US company called Octavian Securities Inc (“Octavian”). He assisted a business associate called Mr Ghuman by attending meetings and building up contacts on behalf of this company. Officer Andrews’ understanding was that this company was set up in 2010.

In August 2010 Mr Sangha opened an account in his name with Chase Bank (the “Chase account”).

Mr Sangha was reimbursed for his expenses in connection with his work for Octavian (including for flights and hotels). Officer Andrews understood that the Chase account was used for this purpose. Mr Sangha’s evidence was that besides the reimbursement of his expenses, he received no remuneration for his work for Octavian.

Officer Andrews also understood that Mr Sangha had made an investment of £100,000 or £125,000 into a company called Yagna Ltd, and that the source of this money was a loan from Mr Ghuman. It was Officer Andrews’ evidence that this information was provided by Mr Sangha’s agent in a letter dated 4 November 2020 (I was not provided with a copy of this letter).

In his witness statement, Mr Sangha said that Yagna Ltd was liquidated and that the money invested was not returned.

In the Notice, Officer Andrews sought bank statements from the Chase account, and information on a £100,000 loan from Mr Ghuman, to establish whether taxable income or gains had been omitted from Mr Sangha’s returns.

HMRC held information based on Common Reporting Standard (CRS) reports suggesting that Mr Sangha held bank accounts in India and China.

Mr Sangha’s agent wrote to HMRC on 23 July 2018 stating that Mr Sangha had no interest in any overseas bank accounts. Officer Andrews subsequently became aware that Mr Sangha had an account with a US bank (namely the Chase account), suggesting that the statement that he held no interest in overseas bank accounts may be incorrect.

It was Officer Andrews’ evidence that Mr Sangha’s agent said that Mr Sangha “had merely forgotten about the USA account”.

In the Notice, Officer Andrews sought more information about any overseas bank accounts held by Mr Sangha.

Officer Andrews’ understanding is that Mr Sangha is, or was, a director and shareholder of a company called Asiana Ltd. I had no submissions or evidence to the contrary so find this to be established as a fact.

Officer Andrews sought information in the Notice relating to payments by Mr Sangha to a personal NatWest credit card which Officer Andrews considered was connected to Asiana Ltd.

Mr Sangha disputed all the items requested in the Notice. Following variation on review, the information and documents sought by HMRC in the Notice were as follows.

The numbering above does not appear in the Notice. The items requested in the Notice are not numbered point by point; there is some numbering in the Notice but it is out of sequence and confusing, as it appears to relate back to various previous items of correspondence. The bundle also does not appear to contain a version of the Notice that reflects the amendments made by HMRC on review. Given these difficulties, Mr Williams agreed that it would be acceptable for me to use the numbering system above, which derives from the appendix to Mr Sangha’s skeleton argument. Where I refer to numbered Items in this decision, the numbering refers to the items as set out in the previous paragraph.

HMRC’s powers to issue an information notice are found in FA 2008, Sch 36. In the case of an information notice issued to a taxpayer in relation to their own tax affairs, the starting point is FA 2008, Sch 36, para 1, which at the time of the issue of the Notice provided, so far as relevant:

The following legislative definitions apply:

HMRC’s powers to issue an information notice are subject to certain restrictions. Those which are relevant to this appeal are as follows:

A taxpayer who receives an information notice may appeal against it, but may not appeal against a requirement to produce statutory records. The relevant provisions of FA 2008, Sch 36 are set out below:

The “Taxes Acts” are defined, in FA 2008, Sch 36, para 58, to include TMA 1970.

For the meaning of information or documents which a person is required to keep and preserve under the Taxes Acts, TMA 1970, s 12B relevantly provides as follows:

Mr Sangha’s case was as follows.

Where a person has submitted a tax return for a period, a taxpayer notice may not be given for the purpose of checking the person’s tax position for that period unless one of the conditions in FA 2008, Sch 36, para 21 applies. HMRC rely on Condition A, which applies where a notice of enquiry has been given in respect of the return and the enquiry has not been completed so far as relating to matters to which the notice relates.

It was not disputed that HMRC had opened, and have not closed, enquiries into Mr Sangha’s tax returns for the tax years 2015-16 and 2016-17. Condition A is therefore satisfied in so far as the Notice was given for the purpose of checking Mr Sangha’s tax position for those years.

I have already noted that, as a result of Mr Williams’ submission that HMRC had provided no evidence that there was an open enquiry for the tax year 2018-19, I have taken HMRC not to be pursuing this point. The Notice should therefore be varied so that it relates only to checking Mr Sangha’s tax position for the years 2015-16 and 2016-17. I have reflected this in the variations I have made to the Notice below.

A further submission by Mr Jones, as set out above, related to the tax year 2016-17. When HMRC opened their enquiry into that year, they stated that the enquiry would be directed to income from property and directorships only and that they would not extend the scope of the enquiry without letting Mr Sangha know. HMRC have not informed Mr Sangha that they have extended the scope of the enquiry. Mr Jones submitted that the enquiry should be limited to the sources of income as originally identified by HMRC, and that the Notice should be similarly limited and should not seek information or documents relating to other types of income.

Mr Jones based this submission on what he described as the “tailpiece” of FA 2008, Sch 36, para 21(4). As set out above, this subparagraph provides as follows:

By “tailpiece” Mr Jones means the wording at the end of this subparagraph, namely “the enquiry has not been completed so far as relating to the matters to which the taxpayer notice relates.” Mr Jones suggested I should read these words as meaning that if HMRC have only opened a limited enquiry, they may only issue an information notice for the purpose of checking the aspects of Mr Sangha’s tax position that are the subject of the enquiry.

I do not accept this submission, because I find that the statutory language does not bear this meaning. I consider that the most natural reading of this provision is that the words “so far as relating to the matters to which the taxpayer notice relates” qualify the word “completed”, rather than having the effect that the notice of enquiry must have been given in respect of the matters to which the taxpayer notice relates. In other words, the tailpiece of FA 2008, Sch 36, para 21(4) only comes into play if an enquiry has been completed, whether fully or partially. HMRC have not issued either full or partial closure notices in respect of their enquiry into Mr Sangha’s tax return for 2016-17.

Under TMA 1970, s 9A, an enquiry extends to anything contained in the return, or anything required to be contained in the return. HMRC can choose to limit an enquiry to certain aspects of a taxpayer’s tax position; this is often referred to as an “aspect enquiry”, although that is not a term used in the legislation. HMRC’s guidance to their officers in the Enquiry Manual is that if an aspect enquiry is extended to a full enquiry, the taxpayer should be informed; but this is not a statutory requirement.

Judge Cannan’s comments in Paul Joseph Bryan t/a Bryan and Co Solicitors [2020] UKFTT 239 (TC) at [38] apply equally to the present case:

I therefore find that the information and documents requested by the Notice in relation to Mr Sangha’s tax position for the tax year 2016-17 are not required to be limited to items that have a bearing on Mr Sangha’s income from property and directorships.

There is no right to appeal against an information notice to the extent that the information or documents required by that notice are statutory records.

As set out above, under FA 2008, Sch 36, para 62, information or documents form part of a person’s statutory records if that person is required under the Taxes Acts to keep and preserve those information or documents, but they cease to be statutory records on the expiry of the period for which they are required to be preserved.

When determining the period for which records must be kept, the starting point under TMA 1970, s 12B(2) is that a person carrying on a trade, profession or business must keep their records until the fifth anniversary of the 31 January next following the year of assessment. For the tax years 2015-16 and 2016-17, these periods expired on 31 January 2022 and 31 January 2023 respectively.

I respectfully agree with the decision of this Tribunal in Sarah Duncan v HMRC [2018] UKFTT 296 (TC) at [28], for the reasons given by Judge Redston in that case, that the time limits in the statutory records provisions continue to run and are not frozen at the date of the issue of the Notice. This means that the records that Mr Sangha needed to deliver correct tax returns for the years 2015-16 and 2016-17 are no longer statutory records under the time limits in TMA 1970, s 12B(2).

The time limits in TMA 1970, s 12B(2) are extended in some circumstances, and it is on these extended limits that HMRC rely. They submit that the effect of TMA 1970, s 12B(1)(b) is that records must be preserved until an enquiry into a return is completed. Therefore, according to HMRC, as there are open enquiries into Mr Sangha’s tax returns for 2015-16 and 2016-17, he must preserve his records relating to those periods until the relevant enquiries are completed.

However, there is an additional component to TMA 1970, s 12B(1)(b). The requirement to preserve records until the completion of any open enquiries is only triggered “where a return is required by a notice given on or before” the day referred to in TMA 1970, s 12B(2). This means that the question of whether the extended period in TMA 1970, s 12B(1)(b) applies depends on whether HMRC issued a notice to file the relevant tax return, and if so, when.

HMRC bear the burden of showing that they issued Mr Sangha with notices to file tax returns for the years 2015-16 and 2016-17, and the dates on which they did so. However, I had no evidence or submissions from HMRC on this point. I cannot deduce, from the fact that Mr Sangha filed tax returns for those years, that he must have received notices to file beforehand, because many taxpayers submit tax returns without having received notices to file. I am also unwilling to invoke, of my own volition, TMA 1970, s 12D, which applies where a person delivers a tax return without having first received a notice to file, because I do not know whether (as is required for that section to apply) HMRC have chosen to treat the return as made and delivered in pursuance of such a notice.

While this point was not argued before me, I do not consider that HMRC can justly claim to have been ambushed. HMRC have expressly relied on the extended time limit in TMA 1970, s 12B(1)(b), and the legislation clearly states that the availability of the extended limit depends on whether a notice to file was served, and when. HMRC should not be surprised that they need to show that they have met this requirement.

I therefore find that HMRC have not demonstrated that any of the documents required by the Notice in relation to Mr Sangha’s tax returns for 2015-16 or 2016-17 are, or continue to be, statutory records.

HMRC may only issue an information notice if the information or documents are “reasonably required” by HMRC for the purpose of checking the taxpayer’s tax position.

Mr Jones submitted that the law is not entirely clear when it comes to the question of where the burden of proof lies in this regard. Nonetheless, it was his submission that the consensus opinion of this Tribunal appears to be that the burden rests with HMRC.

HMRC’s submissions on this issue were inconsistent. In their statement of case, and in Mr Williams’ opening oral submissions, HMRC accepted that the burden of proof was on HMRC to show that the documents and information requested are reasonably required to check Mr Sangha’s tax position. However in their skeleton argument, HMRC cited the following passage from Judge Redston’s decision in Joshy Mathew v HMRC [2015] UKFTT 139 (TCC) (“Mathew”):

I asked Mr Williams to clarify HMRC’s submissions in this regard. He said that as the skeleton argument had a more recent date, he would like to rely on the submissions in the skeleton and not on the statement of case. However, despite this clarification, I did not find HMRC’s submissions, taken as a whole, to be consistent with them adopting the position that the burden of proof is on Mr Sangha. This is because throughout their submissions, oral and written, HMRC repeatedly state that the information or documents required are reasonably required, not that Mr Sangha has failed to show that they are not reasonably required.

In addition, HMRC’s skeleton argument did no more than quote the passage from Mathew, without explaining how they considered the finding in that passage applies to the present case. I note that it would not be correct to cite Mathew as authority for this Tribunal having previously decided that the burden lies on the taxpayer in these circumstances, because Judge Redston found that it was not necessary to decide the question in that case, and went on, at [85], to state that “it remains arguable that the burden is on HMRC”.

I have decided that I should approach this appeal on the basis that the burden is on HMRC to establish that the information and documents were reasonably required for the purpose of checking Mr Sangha’s tax position. As I have found that HMRC’s submissions on this issue were not clear, I consider it is appropriate for me to set out below the reasons why I have adopted this approach.

The conclusions set out in Mathew at [82] and [83], cited above, followed the judge’s analysis of R (oao) Derrin Brother Properties Ltd v HMRC [2014] EWHC 1152 (Admin) (“Derrin”) and R v Commissioners of Inland Revenue ex parte T C Coombs & Company [1991] 2 AC 283 (“Coombs”). Both Derrin and Coombs involved judicial review proceedings relating to third party notices. Third party notices, which require a third party to provide information or documents for the purpose of checking a person’s tax position, are issued under FA 2008, Sch 36, para 2. These differ from taxpayer notices, which require a taxpayer to provide information or documents for the purpose of checking their own tax position, and are issued under FA 2008, Sch 36, para 1. Unlike taxpayer notices, third party notices can only be issued with either the agreement of the taxpayer, or the approval of the Tribunal.

In Cliftonville Consultancy Ltd v HMRC [2018] UKFTT 231 (TC) (“Cliftonville”), Judge Nicholl set out, at [25] to [39], her reasons for considering the appeal on the basis that the burden was on HMRC to establish that the information and documents were reasonably required for the purpose of checking the appellant company’s tax position. In her analysis, Judge Nicholl considered the different procedures for issuing taxpayer notices and third party notices, and stated at [39]:

In Hargreaves and others v HMRC [2021] UKFTT 80 (TC) (“Hargreaves”), Judge Vos tended to the view that the correct analysis was that HMRC have the burden of initially providing reasons why the information is reasonably required to check the taxpayer's tax position and that, once they have done this, the burden shifts to the taxpayer to show why the information is not reasonably required. At [64], the judge concluded:

In Perring v HMRC [2021] UKFTT 110 (TC) at [16], Judge Gething found that the burden of proof lies with HMRC. In this case, too, the judge compared third party notices to taxpayer notices. In the case of a third party notice, the judge found that it was clear that HMRC has the burden of satisfying the Tribunal that the officer giving the notice is justified in doing so. The judge went on to find that in the case of a taxpayer notice, there is no indication that Parliament had relieved HMRC of the burden of satisfying the Tribunal that the information notice satisfies the statutory criteria and that the officer was justified in issuing the notice.

In Hackmey v HMRC [2022] UKFTT 160 (TC) at [34], Judge Aleksander cited the decisions in Cliftonville and Hargreaves, and found that it was probably the better view of the legislation that the burden of proof rests on HMRC to show that the requirements for issuing an information notice (including showing that the information or documents sought are reasonably required) are met.

In Jenner v HMRC [2022] UKFTT 203 (TC) (“Jenner”), HMRC submitted that the burden of proof fell on them to show that the information sought in the disputed notices was reasonably required. Judge Sukul agreed with Judge Nicholl’s remarks in Cliftonville (quoted above) and on that basis, accepted HMRC’s submission.

Having reviewed the cases cited above, I agree with Mr Jones’s submission that consensus opinion of this Tribunal appears to be that the burden of proof rests with HMRC. I gratefully adopt the conclusions of the Tribunal in Cliftonville on this issue and, for the reasons given by Judge Nicholl, find that I should approach this case on the basis that the burden is on HMRC to establish that the information and documents sought by the Notice are reasonably required for the purpose of checking Mr Sangha’s tax position.

There is no statutory definition of “reasonably required”. HMRC cited a number of previous decisions of this Tribunal to assist me in assessing whether the information and documents sought by the Notice were reasonably required for the purpose of checking Mr Sangha’s tax position.

In Spring Capital v HMRC [2015] UKFTT 8 (TC) at [34], Judge Mosedale said:

In Steven Price v HMRC [2011] UKFTT 624 (TC) (“Price”), in the context of an application by the taxpayer for a direction that HMRC issue a closure notice in relation to the enquiry they had opened into his personal tax return, Judge Mosedale commented, at [10], that:

HMRC submitted, and I accept, that although the Tribunal in Price was considering whether to direct the issuing of a closure notice, this extract provides helpful guidance in the context of information notices.

HMRC also cited Mathew and Jenner as examples of cases in which the Tribunal has accepted that it was reasonable for HMRC to check whether the taxpayer has other sources of income.

In Bemal Patel v HMRC [2017] UKFTT 323 (TC) (“Bemal Patel”), Judge Citron said at [46]:

While none of these cases are binding on me, I confirm that, when considering whether the information and documents in the Notice were reasonably required to check Mr Sangha’s tax position, I have kept in mind the guidance provided by the Tribunal in these previous decisions.

An information notice only requires a person to produce a document if it is in that person's possession or power.

In HMRC v Mattu [2021] UKUT 245 (TCC) (“Mattu”), the Upper Tribunal approved the approach taken in Parissis v HMRC [2011] UKFTT 218 (TC) at [19], where Judge Mosedale said that:

The Upper Tribunal confirmed at [101] that the term “power” means both legal power and de facto power to obtain documents (or information).

In Mattu, the Upper Tribunal also approved the approach adopted in H A Patel & K Patel (a partnership) v HMRC [2014] UKFTT 167 (TC) (“H A Patel”). In that case, the taxpayers claimed that the documents requested in an information notice were not in their possession or power, but were within the possession of a professional offshore trustee. Judge Sinfield held at [14]-[16] that the taxpayers must have had power to influence the behaviour of the trustee and that a single request and refusal (with no attempt to follow up the request) did not constitute a serious attempt to obtain the relevant information from the trustee, and therefore it could not be concluded that the information and documents were not in the taxpayers’ possession or power.

I have already found that the Notice was given with the approval of an authorised officer within the meaning of FA 2008, Sch 36, para 20. This means that any requests in the Notice for documents originating more than six years before the date of the Notice are not invalidated on account of the age of those documents.

Mr Jones submitted that to be valid, the Notice must exhibit a sufficient degree of specificity. I respectfully agree with the Tribunal in RD Utilities Ltd v HMRC [2014] UKFTT 303 (TC) at [10] where it was said that:

A requirement for an information notice to be worded in sufficiently clear terms so that both parties will know whether it has been complied with is, moreover, consistent with the statutory provisions that impose penalties where a person fails to comply with an information notice. If the wording in the notice is unclear, HMRC will not be able to establish that the notice has not been complied with, and so will not be able to impose penalties for non-compliance. This is an additional reason why information notices should be expressed in clear terms.