Financial institutions – the future
Looking ahead, HMRC is in the latter stages of introducing new legislation in relation to the acquisition of information and documents from third parties. This new legislation means the above permissions will no longer be necessary.
If implemented, HMRC will be allowed to issue Financial Institution Notices (FINs) to banks and building societies without receiving the permission of either the first party taxpayer, or the Tribunal. FINs will entitle HMRC to demand the provision of particular customer records and information, including: account statements, loan applications and even hypothetical borrowing potential.
It’s important to note that the draft legislation does not require HMRC to have an open enquiry into a taxpayer before a FIN can be issued. In essence, this means HMRC will be able to demand a taxpayer’s bank statements from any UK bank, without the taxpayer having any prior knowledge that HMRC considers them to be a tax risk.