Inland Revenue has published guidance on its new information powers now contained in section 20B of Taxes Management Act 1970. This new provision allows Inland Revenue to obtain information about a taxpayer from that taxpayer or a third party who is in a position to provide information.
The section contains these exceptions:
- a taxpayer is not bound to provide documents which relate to a pending tax appeal;
- a barrister, solicitor or advocate is now bound to deliver documents subject to professional privilege;
- an auditor is not bound to deliver documents created in his duties as auditor;
- a tax adviser is not bound to deliver documents which are his property and which consist of communications for giving or obtaining tax advice.
Inland Revenue makes clear that there is no general law provision of privilege which overrules section 20 which is a section complete within itself.
However this does not mean that Inland Revenue can help itself to documents not specifically excluded above. A tax inspector must satisfy a Commissioner that in the inspector’s reasonable opinion the documents comtain or may contain information relevant to any tax liability to which that person is subject. It is unlikely that an inspector could so satisfy a Commissioner for general legal advice. Also, once an issue has been raised by Inland Revenue, subsequent advice on the matter is outside the scope of the powers.
Further extensive details of these powers are given in Tax Bulletin 46, available on annual subscription from Inland Revenue.
[2000]