HMRC has issued draft legislation to allow it to access information about taxpayers directly from financial institutions by issuing Financial Institution Notices (‘FINs’). The proposals mean HMRC can obtain information without clearance from the taxpayer or a tribunal. HMRC claims the requirement to get permission causes unnecessary delays.
Concerns have been raised by The Low Incomes Tax Reform Group who consider that removal of this protection will lead to HMRC issuing more information requests than previously, and that institutions need a clear right to appeal if the information request is unduly onerous.
The tax system requires checks and balances to stop either side exercising excessive power. It is not unreasonable to require HMRC to justify complex information requests and institutions should be protected from excessive demands.