Enter Your E-mail

James Bailey looks at the 'Subject Access Report' and how taxpayers can use it.

Introduction - Relying on Advice from HM Revenue & Customs

My heart always sinks when someone with a tax problem tells me that they rang HM Revenue and Customs (HMRC) “…and they said it was all right”. More often than not, they have either been given the wrong information, or they have misunderstood what they were told.

If you must ring HMRC for help, then make sure you get the full name of the person you are speaking to, make a note of what was said, and follow it up with a letter saying ‘On (date) I rang your office and spoke to (full name). I understood them to say (give details) and so I propose to (give details). Please contact me immediately if I have misunderstood what I was told’. Send it by recorded delivery, and keep a copy.

Subject Access Request

I recently came across a little known way of getting information from HMRC, using the 1998 Data Protection Act. A new client was involved in a dispute with HMRC and claimed they had been assured something they planned to do would not produce a tax liability when in fact it would. They said they had made a SAR, which I discovered refers to a ‘Subject Access Request’ under the Data Protection Act.

How Does it Work?

The Act imposes a duty on any organisation that holds personal data on individuals to respond to requests by the individual concerned to see the information held about them. Using SARs, this client had obtained recordings of phone conversations they had had with HMRC officials and written notes of other unrecorded conversations.

Unfortunately, in this client’s case, the information was of little help (they had asked the wrong question), but in some circumstances an SAR might be the answer if you are having problems with HMRC – or any other organisation such as a bank that holds data about you.

In order to make an SAR, you need to write to the organisation concerned, specifying exactly what information you want. Organisations are entitled to charge a fee of up to £10 (£50 in the case of paper-based health or education records) for complying with each SAR, so make the first one as comprehensive as you can.

If you do not get a response within 40 days, you can complain to the Information Commissioner’s Office (their website is at ICO. ).

Do They Always Work?

There are some exemptions from complying with SARs, including if it would ‘prejudice the assessment or collection of tax’, so HMRC could probably refuse to tell you their reasons for investigating your affairs while the investigation is still going on but they are not exempt from disclosing such things as notes of telephone conversations they have had with you.

In some cases you will need to make your request under the Freedom of Information Act 2000. This applies to ‘unstructured’ information – that is, information not held in a file or ‘partly organised’ material, such as a paper file kept in date order. These days, most information held by HMRC is likely to be ‘structured’ and so the Data Protection Act is more likely to be the relevant legislation.

Practical Tip

I am not suggesting that you should bombard HMRC with SARs. But they do have their place, particularly in cases where you have been given incorrect information over the phone, as happens only too often.

I have a client who is in trouble for not making his returns under the Construction Industry Scheme. As a ‘contractor’ he is supposed to file a ‘nil’ return online if he has not used any subcontractors in the period but he is adamant that he rang HMRC and was told not to bother. If this dispute goes on much longer, I can feel an SAR coming on!

About The Author

Tax Insider publishes monthly newsletters and reports for everyone with an interest in responsible tax saving, including professional advisers, business owners, entrepreneurs, property investors and other UK taxpayers.

For general taxpayers visit www.taxinsider.co.uk 

For accountants and tax professionals visit www.taxinsiderpro.co.uk