An HMRC letter asking for financial records can feel intrusive.
It may request several years of bank statements, business records, property documents or explanations of individual transactions. Sometimes, the taxpayer understands why HMRC needs the information. In other cases, the request may seem excessive or unrelated to the tax issue.
The worst response is usually to ignore the letter.
However, that does not mean you should send every document immediately without first reviewing the request.
HMRC has wide information-gathering powers, but those powers have limits. The information must normally be reasonably required to check the tax position or collect a tax debt. In addition, restrictions protect certain documents and types of information.
Therefore, a careful response should achieve two things:
- provide the information that HMRC has a legal right to receive; and
- protect the taxpayer from unnecessary disclosure or an unreasonable request.
What Is an HMRC Information Notice?
An information notice is a formal legal request for information or documents.
Schedule 36 of the Finance Act 2008 gives HMRC the power to issue these notices when it checks a person’s tax position or, in certain cases, collects a tax debt.
A notice may require the recipient to:
- provide information;
- produce documents; or
- do both.
For example, HMRC may request:
- business accounts and bookkeeping records;
- bank and credit-card statements;
- sales invoices and purchase receipts;
- contracts and loan agreements;
- property purchase and sale documents;
- rental records;
- payroll information;
- details of overseas income or assets;
- explanations of payments or deposits; and
- electronic accounting data.
However, HMRC should not ask for information simply because it might be interesting. The legal test is whether HMRC reasonably requires it for the relevant tax purpose.
Is Every HMRC Request a Formal Information Notice?
No. HMRC often starts with an informal request.
An informal request may appear in an opening letter or during correspondence with the taxpayer or their accountant. It may ask the person to provide records voluntarily by a particular date.
If the taxpayer does not cooperate, HMRC may then issue a formal Schedule 36 notice.
| Type of request | General position |
| Informal request | A voluntary request that does not itself carry Schedule 36 non-compliance penalties |
| Formal taxpayer notice | A statutory notice requiring information or documents from the taxpayer |
| Third-party notice | A notice requiring another person or organisation to provide information about the taxpayer |
| Tribunal-approved notice | A notice approved by the First-tier Tribunal, usually with more limited appeal rights |
An informal request should not be ignored merely because it is not yet a formal notice. Failure to engage may lead HMRC to use formal powers. It may also affect HMRC’s view of the taxpayer’s cooperation and any later penalty reduction.
Nevertheless, before responding, check whether the letter refers to “Schedule 36 Finance Act 2008”, gives formal appeal rights or warns about penalties for failure to comply.
What Is a Taxpayer Information Notice?
A taxpayer notice asks a person for information or documents that HMRC reasonably requires to check that person’s tax position or collect a relevant tax debt.
The taxpayer may be:
- an individual;
- a sole trader;
- a partner;
- a trustee;
- a company; or
- another taxable person or organisation.
HMRC does not always need tribunal approval before issuing a taxpayer notice. However, legal restrictions still apply to what the notice may request.
The taxpayer may often appeal against the notice or against individual requirements within it. However, important exceptions apply.
What Is a Third-Party Information Notice?
A third-party notice asks someone other than the taxpayer to provide information about the taxpayer.
For example, HMRC may seek information from:
- a bank;
- an employer;
- a customer or supplier;
- an accountant;
- a solicitor;
- a letting agent;
- a pension provider; or
- another business.
Depending on the type of notice, HMRC may need the taxpayer’s agreement or approval from the First-tier Tribunal.
Different procedures now also apply to certain financial institution notices. Therefore, the rights of the taxpayer and the third party depend on the exact legal power that HMRC uses.
If you learn that HMRC has approached a third party, obtain a copy of the notice or ask HMRC to explain the legal basis where possible.
What Does “Reasonably Required” Mean?
HMRC can normally ask only for information or documents that it reasonably requires to check the tax position or collect a relevant tax debt.
This does not mean that HMRC must already know the records will prove additional tax is due. It can ask for information that will help it test the return or understand a transaction.
However, the request should have a sensible connection with the matter under review.
For example, bank statements may be reasonably required where HMRC needs to check business income. In contrast, requesting every personal document for a narrow question about one business expense may require further explanation.
When reviewing a notice, consider:
- which tax and period HMRC is checking;
- what risk or transaction HMRC is examining;
- why each requested item matters;
- whether the request covers an excessive period;
- whether the information exists;
- whether the taxpayer holds or controls it; and
- whether HMRC could obtain the answer in a simpler way.
A wide request is not automatically invalid. Nevertheless, HMRC should be able to explain its relevance.
Can HMRC Ask for Documents That Do Not Exist?
A notice can require a person to produce a document only if it is in their possession or power.
“Possession” generally means that the person physically or electronically holds it.
“Power” can include a document that the person has the ability to obtain or control, even if somebody else currently holds it.
However, HMRC cannot require a taxpayer to produce a document that never existed or which they genuinely cannot obtain.
The taxpayer may still need to provide information. For example, HMRC may ask for an explanation or schedule based on existing records. The notice can sometimes require a person to create a document containing information that they hold.
If a requested document is missing, explain:
- whether it ever existed;
- why it is no longer available;
- what steps you took to obtain a replacement; and
- what alternative evidence you can provide.
Do not remain silent and do not create a false document to fill the gap.
Are Any Documents Protected?
Yes. Schedule 36 contains several restrictions.
Depending on the facts, HMRC may face restrictions when requesting:
- legally privileged communications;
- certain personal records;
- journalistic material;
- documents relating to the conduct of a pending tax appeal;
- some auditors’ working papers;
- certain tax advisers’ working papers; and
- documents created entirely more than six years earlier without the required internal approval.
Legal professional privilege generally protects confidential communications between a client and lawyer for the purpose of legal advice or litigation. However, not every document sent to a solicitor becomes privileged.
Likewise, there is no general right to withhold ordinary accounting records simply because an accountant holds them.
This area can become technical. Therefore, do not refuse a request on the ground of privilege without taking appropriate advice.
What Are Statutory Records?
Statutory records are records that tax law requires a person to keep and preserve.
They may include records needed to support:
- a Self Assessment return;
- a Company Tax Return;
- VAT returns;
- PAYE reporting; or
- another tax obligation.
The exact records depend on the person, business and tax involved.
This distinction matters because there is generally no right of appeal against a requirement to provide statutory records.
Therefore, a taxpayer may have appeal rights against some parts of a notice but not others.
For example, the person might challenge a request for a wide range of non-statutory personal information. However, they may still need to provide the underlying business records that the law required them to retain.
How Long Do You Have to Respond?
The information notice must give a deadline.
HMRC often allows approximately 30 days, but there is no universal minimum period. The period must be reasonable based on the amount and nature of the information requested.
A short deadline may be reasonable for one readily available document. However, a request covering several years, archived material or records held overseas may require longer.
HMRC’s internal guidance tells officers to consider reasonable requests for more time.
Therefore, contact the officer before the deadline if you cannot comply fully. Explain:
- why more time is needed;
- which documents are already available;
- which items remain outstanding;
- what steps you are taking; and
- the date by which you expect to complete the response.
Ask HMRC to confirm any extension in writing. Do not assume that an unanswered email has changed the statutory deadline.
Can You Appeal an Information Notice?
In many cases, yes.
A taxpayer can often appeal against the whole notice or against specific requirements within it.
The appeal must normally:
- be made in writing;
- reach HMRC within 30 days of the date on the notice;
- go to the officer who issued the notice;
- identify what you are appealing; and
- explain the grounds of appeal.
Possible grounds may include:
- HMRC does not reasonably require the information;
- the request is too wide;
- the information does not relate to the tax position under review;
- the document is not in the recipient’s possession or power;
- a legal restriction protects the material;
- the requirement is unduly burdensome; or
- the time allowed is unreasonable.
However, there is generally no right of appeal:
- against a requirement to produce statutory records; or
- where the First-tier Tribunal approved the notice.
Appeal rights for third-party and specialist notices can also differ.
If you appeal only one part of the notice, you must normally comply with the parts that you have not appealed. Therefore, do not treat a limited appeal as permission to ignore the entire notice.
Should You Challenge an Unreasonable Request Informally First?
Often, yes—provided that you protect the formal appeal deadline.
A discussion with the HMRC officer may resolve the issue more quickly. The officer might narrow the request, explain its relevance or allow more time.
For example, you could ask whether:
- a shorter date range would meet HMRC’s needs;
- sample documents would answer the question;
- a transaction schedule could replace hundreds of separate documents;
- HMRC already holds part of the information; or
- an agreed staged response would be acceptable.
However, informal discussions do not necessarily extend the 30-day appeal period.
Therefore, if the deadline approaches and the issue remains unresolved, consider submitting a protective appeal.
What Happens If You Do Not Respond?
Ignoring a formal information notice can lead to financial penalties.
The standard initial penalty for failing to comply is £300.
If the failure continues after HMRC issues the required notice, HMRC may charge daily penalties of up to £60 per day.
In more serious cases, the Upper Tribunal may approve an additional tax-related penalty. This can arise where the continuing failure causes or is likely to cause a significant loss of tax. The amount can depend on the tax at risk.
HMRC may also penalise a person for:
- deliberately obstructing a tribunal-approved inspection;
- concealing or destroying documents; or
- carelessly or deliberately providing inaccurate information or documents.
In very serious cases, deliberately concealing or destroying a document connected with a tribunal-approved notice may become a criminal offence.
Most cases do not reach that stage. However, ignoring the notice allows a manageable information request to grow into a separate penalty dispute.
What If You Have a Reasonable Excuse?
A person will not normally face a Schedule 36 non-compliance penalty if they have a reasonable excuse for the failure.
A reasonable excuse depends on the individual facts.
Possible examples may include:
- a serious illness;
- bereavement;
- an unexpected hospital admission;
- fire, flood or theft affecting the records;
- a major IT failure despite proper precautions; or
- another exceptional event outside the person’s control.
However, the taxpayer should comply without unreasonable delay once the excuse ends.
Simply being busy, forgetting the deadline or assuming that an accountant would deal with it may not amount to a reasonable excuse.
If a genuine problem prevents compliance, contact HMRC immediately rather than waiting for a penalty.
Does Responding Mean You Agree With HMRC?
No.
Providing information does not mean that you accept HMRC’s interpretation or agree that additional tax is due.
You can supply the requested records while clearly explaining:
- what each document shows;
- which assumptions you dispute;
- where HMRC has misunderstood a transaction;
- which figures require context; and
- why the original tax treatment remains correct.
A well-organised response can reduce the risk that HMRC draws the wrong conclusion from isolated documents.
For example, a large bank credit may look like undeclared income. However, supporting records may show that it was a loan, transfer between accounts, inheritance or repayment.
Context matters as much as the document itself.
Should You Send More Than HMRC Requested?
Usually, provide what the notice requires together with the explanations needed to make the evidence understandable.
Sending a large volume of unrelated material can create new questions. It may also make it harder for HMRC to identify the relevant evidence.
Before submission:
- remove duplicate documents;
- organise records in the same order as the notice;
- label each item clearly;
- prepare a schedule where useful;
- explain missing documents;
- redact irrelevant third-party personal information where legally appropriate; and
- keep an exact copy of everything supplied.
However, do not alter original records or hide relevant content.
Practical Guide: How to Respond to an HMRC Information Notice
1. Confirm that the notice is genuine
Check the officer’s details, tax reference and HMRC contact information. If concerned, use an independently verified HMRC number.
2. Identify the type of request
Establish whether the letter is informal or a formal Schedule 36 notice.
3. Record both deadlines
The deadline for complying may differ from the deadline for appealing. Record each one separately.
4. Review every request
Create a list showing what HMRC wants, whether you hold it and where you can obtain it.
5. Check relevance
Ask how each item connects with the tax position under review.
6. Identify protected material
Consider whether any request involves privilege, personal records or another statutory restriction.
7. Separate statutory records
Remember that appeal rights may not apply to records that tax law required you to keep.
8. Request more time early
Explain why you need an extension and propose a realistic completion date.
9. Appeal where appropriate
Submit a written appeal within the deadline if the notice or a specific requirement is unreasonable or legally invalid.
10. Prepare a clear response
Number the documents, provide a contents list and connect explanations to the supporting evidence.
11. Keep proof of delivery
Retain the complete submission and evidence showing when HMRC received it.
12. Continue communicating
If one item remains unavailable, update HMRC rather than allowing the deadline to pass without explanation.
Frequently Asked Questions
Must I answer every question in an HMRC letter?
It depends on whether the request is informal or forms part of a valid statutory notice. A formal notice creates legal duties, although appeal rights and restrictions may apply. Review each requirement rather than ignoring the whole letter.
Does HMRC normally give 30 days to respond?
HMRC commonly allows around 30 days, but the notice must provide a reasonable period based on the request. Check the actual date written on the notice.
Can I ask HMRC for more time?
Yes. Contact the officer before the deadline, explain why you need more time and propose a realistic date. Ask HMRC to confirm the extension in writing.
Can I appeal because the request involves too much work?
The burden involved can be relevant, particularly if the request is wider than HMRC reasonably needs. However, inconvenience alone does not automatically invalidate a notice.
Can HMRC ask for personal bank statements?
It may do so where the statements are reasonably required to check the tax position. For example, HMRC may seek them where it has reason to believe business income entered a personal account. However, the scope and relevance of the request should still be reviewed.
Can HMRC obtain information from my bank?
HMRC has powers to obtain information from banks and other third parties. The process and appeal rights depend on the type of notice used.
Can I appeal a request for accounting records?
There is generally no right to appeal a requirement for statutory records. However, it may still be possible to discuss the format, scope or deadline with HMRC.
What is the penalty for ignoring an information notice?
The standard initial penalty is £300. Continuing failure can lead to daily penalties of up to £60. Further tax-related penalties may apply in serious cases.
Can HMRC fine me if I had a reasonable excuse?
A penalty should not apply if the person had a reasonable excuse. However, they should act without unreasonable delay after the excuse ends and provide supporting evidence where possible.
Should I let my accountant respond?
An authorised accountant can review the notice, communicate with HMRC and organise the response. However, the taxpayer should still check that the information supplied is complete and accurate.
Where to Find Official HMRC Information
Current official sources include:
- HMRC Compliance Handbook: what a taxpayer notice may contain, including the “reasonably required” test and statutory-record rules.
- HMRC guidance on restrictions applying to taxpayer notices, covering possession, older documents, privilege and other protected information.
- HMRC guidance on time to comply, explaining how officers should set and extend reasonable deadlines.
- HMRC guidance on appealing an information notice, covering the written 30-day appeal procedure.
- HMRC guidance on information-notice penalties, explaining failures, reasonable excuse and appeal rights.
- Finance Act 2008, Schedule 36, setting out HMRC’s statutory information and inspection powers.
- HMRC compliance-check factsheets, covering taxpayer rights, information notices and penalties.
The correct response depends on the notice, tax involved and documents requested. Therefore, seek professional advice promptly where the request appears excessive, includes protected material or carries a near appeal deadline.
💡 Key Takeaway
HMRC has wide powers to request information and documents, but those powers are not unlimited.
A formal Schedule 36 notice must normally request information that HMRC reasonably requires for a valid tax purpose. Restrictions may protect certain documents, and the recipient may have a right to appeal.
However, strict deadlines apply. Ignoring the notice can lead to an initial £300 penalty, daily penalties and, in serious cases, further action.
The safest approach is to review the notice immediately, protect the appeal deadline and communicate with HMRC before the time to comply expires.
Need Help?
If HMRC has issued an information notice or requested a large volume of financial records, Accounts Tax Group can help you understand what the notice requires.
We can review whether the information appears reasonably required, identify relevant appeal rights and prepare a clear, organised response. We can also communicate with HMRC where documents are missing, the deadline is unrealistic or the request needs clarification.
Contact us promptly, particularly if the 30-day appeal period or response deadline is approaching.
For further practical guidance, explore our HMRC Insights and Updates.
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