RSTP2005 - Third party notice

Third party notice

We can give an information notice (a ‘third party notice’) to you requiring you to provide information and/or produce documents where:

• it is reasonably required for the purpose of checking the tax position of another person whose identity is known to us (that is the taxpayer*); and
• it is reasonable for you to be required to provide the information and/or produce the document.

Particular rules apply to reviews and appeals in relation to information notices – see RSTP6004 for further guidance.

Approval of a third party notice

A third party notice cannot be given unless it has the approval of either:

• the taxpayer*; or
• the tribunal (see RSTP2008).

The two exceptions to this rule are where a third party notice is given to:

• a parent undertaking** to check the tax position of more than one of its subsidiary undertakings**; or
• a partner in a partnership for the purpose of checking the tax position of one or more of the other partners.

In either of these cases, the third party notice can be given without the approval of the tribunal or any of the other subsidiary undertakings or other partners (whichever applies).

Naming the ‘taxpayer’ in a third party notice

A third party notice must name the taxpayer*.

If a third party notice is given for the purpose of checking the tax position of more than one partner in a partnership, the notice only needs to state this and give a name by which the partnership is known (or under which it is registered for any purpose).

If the notice is given to any person for the purpose of checking the tax position of a parent undertaking** and any of its subsidiary undertakings**, the notice only needs to state this and name the parent undertaking**.

If the notice is given to the parent undertaking** for the purpose of checking the tax position of more than one subsidiary undertaking**, the notice only requires to state this and any references to ‘naming the taxpayer’ instead mean making this statement.

Where the tribunal has approved the notice (see RSTP2008) it can disapply this naming requirement if it is satisfied that we have reasonable grounds for believing that naming the taxpayer* might seriously prejudice the assessment or collection of tax (see further below). We will need to ensure that the description of the information or documents is sufficient for you to identify precisely what information and/or documents are required.

Copying a third party notice to the ‘taxpayer’

When we give a third party notice we must give a copy of the notice to the taxpayer* to whom it relates, unless:

• the tribunal has disapplied this requirement;
• the notice is given to a parent undertaking** to check the tax position of more than one of its subsidiary undertakings**; or
• the notice is given to a partner in a partnership for the purpose of checking the tax position of one or more of the other partners.

The tribunal will only disapply this requirement if it is satisfied that we have reasonable grounds for believing that giving a copy of the notice to the taxpayer* might prejudice (see below) the assessment or collection of tax.

‘Prejudice’ and ‘seriously prejudice’ in this context means that giving a copy of the third party notice to the taxpayer* or naming the taxpayer* in the notice may create a risk or serious risk to effective assessment or collection of tax.

Such situations could include risks of:

• tipping off a person suspected of committing a criminal offence;
• collusion with or intimidation of a third party;
• the person’s flight or disappearance;
• the alienation of assets; and
• the destruction of evidence.

We will try, wherever it is possible and practical to do so, to get the information and/or documents needed from the person whose tax position we are checking before approaching another person or giving a third party information notice for the information and/or documents.

There may, however, be circumstances which make it inappropriate to approach the person whose tax position is being checked, such as the information and/or documents not being in the person’s power to provide or where we need to verify facts independently.

*Meaning of ‘taxpayer’ in the context of partnerships and groups of undertakings

• i) in the case of a notice given to a person other than one of the partners in a partnership, for the purposes of checking the tax position of more than one partner, ‘taxpayer’ means ‘at least one of the partners’; and
• ii) in the case of a notice given to any person for the purposes of investigating the tax position of a parent undertaking** and any of its subsidiary undertakings**, ‘taxpayer’ means ‘parent undertaking’

**Meaning of ‘parent undertaking’, ‘subsidiary undertaking’ and ‘undertaking’

References to ‘parent undertaking’, ‘subsidiary undertaking’ and ‘undertaking’ have the meanings given in sections 1161 and 1162 of, and schedule 7 to, the Companies Act 2006.

RSTPA 2014 sections 124-126 and 128-129