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Hargreaves - Burden of proof on HMRC in taxpayer information notice appeals

09 June 2021.

In Hargreaves and others v HMRC [2021] UKFTT 80 (TC), the First-tier Tribunal (FTT) confirmed that the burden of proof in an appeal against an information notice issued under paragraph 1, Schedule 36, Finance Act 2008 (FA 2008), is on HMRC.


In January 2018, HMRC issued taxpayer information notices under paragraph 1, Schedule 36, FA 2008 (the Notices), to 21 pension scheme administrators (the Appellants), requesting certain information. 

HMRC issued the Notices as it wished to establish whether tax liabilities may have arisen, or may be imposed, in relation to the pension schemes and for which the Appellants would be liable. The Appellants appealed against the Notices.

As the Appellants' grounds of appeal were materially the same, all of the appeals were heard together before the FTT. 

FTT decision 

The appeals were allowed in part. 

The Appellants argued that HMRC should have issued third party notices under paragraph 2, Schedule 36, FA 2008, rather than taxpayer notices under paragraph 1, Schedule 36, FA 2008. The FTT rejected this argument on the basis that the Notices were issued to check the tax position of the Appellants in their capacity as scheme administrators, not to check the tax position of the individuals involved in the pension schemes themselves.  

The Appellants also submitted that the information requested by HMRC in the Notices was not "reasonably required". The FTT rejected this argument, and the Notices were upheld subject to changes to some of the information requests contained within them. 

The FTT was of the view that the burden of proving that information requested in a taxpayer notice was reasonably required was on HMRC. Once that burden has been discharged, it is then for the taxpayer to establish that the information was not reasonably required. The position is, however, different for third party notices, where the sole burden of proof lies on the taxpayer. The FTT noted that it was not surprising that the burden in appeals concerning third party notices fell on the appellant, as HMRC would already have persuaded the FTT that the information it sought was reasonably required (the issue of a third party notice, unlike a taxpayer notice, must be approved by the FTT, unless the taxpayer consents to the issue of the notice).


The FTT noted in its decision that the issue of where the burden of proof lies in relation to Schedule 36 notices had received inconsistent treatment in the past. This decision is helpful in confirming that HMRC bears the burden of establishing that information requested in taxpayer notices is reasonably required. 

By way of further recent example of the inconsistent treatment of the burden of proof issue, a differently constituted FTT in Perring v HMRC [2021] UKFTT 110 (TC), has held that the burden of proof for establishing that information is reasonably required under a taxpayer notice lies with HMRC alone. The FTT rejected HMRC's argument that once HMRC has shown an initial case that the information is reasonably required, the burden of proof passes to the taxpayer. 

The decision can be viewed here.