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Where Taxpayers and Advisers Meet

What does HMRC know?

Posts: 42
Joined: Fri May 06, 2016 5:05 pm

What does HMRC know?

Postby FigNewton » Mon Apr 27, 2020 11:37 am

I am participating in the community forum of a broker that serves many clients who are relatively new to stock and shares investing. Repeatedly I encounter great ignorance about taxes on dividends and capital gains. Perhaps these clients will never exceed the annual allowances for dividends and capital gains.

But I am curious what will happen if they do have taxes to pay and with either don't realise or are trying to evade. I believe the broker is required to send transaction data labelled with the customer's TIN to the FCA. But does FCA pass that data on to HMRC? Are brokers required to provide any data to HMRC, similarly as banks send data about interest payments?

Posts: 237
Joined: Mon Aug 12, 2019 8:41 am
Location: Sandhurst, Berkshire

Re: What does HMRC know?

Postby jerome.lane » Wed Apr 29, 2020 11:26 am

This is where self assessment potentially falls down! Brokers don't have to provide information directly to HMRC as a matter of course. There is an agreement or memorandum of understanding between the FCA and HMRC on information exchange which must be carried out within the law (which is complex due to the raft of data protection issues). HMRC's Connect super snooper computer correlates information from many sources (including banks, ebay, Zoopla, the land registry, insurance brokers, etc) to help identity tax irregularities and people living beyond their means. It could be assumed that HMRC have powers to verify a suspicion before opening an enquiry.... There was a consultation on how online platforms could be more responsible a couple of years ago although I'm not sure if there's going to be an outcome.
Jerome Lane
Tax Adviser
Telephone: 07943 005902

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