HMRC has won an appeal at the Court of Appeal over its decision to serve an information request to a long-standing non-UK resident, in a landmark decision about the scope of the tax authority’s powers beyond the UK borders. 
The Court of Appeal was asked to hear an appeal against earlier decisions by the First Tier Tribunal (FTT) and a judicial review, which had concluded that HMRC acted beyond its powers in seeking information from the taxpayer once he was no longer resident. 
The court heard that Jimenez, who is a UK national, now resides in Dubai, having moved from the UK first to Cyprus and then to the UAE. He also has a Spanish passport. 
As part of this investigation, in May 2016 HMRC issued a notice under paragraph 1 of Schedule 36 to the Finance Act 2008 (FA 2008) to the taxpayer at his address in Dubai. Attached to the notice was a schedule of the information which he was asked to produce including details of bank and credit card accounts since 6 April 2004 and a schedule of his visits to the UK between that date and 5 April 2013. 
The sole issue, both at this appeal and earlier, was whether paragraph 1 of Schedule 36 authorises a taxpayer notice to be issued and sent to a taxpayer who at the relevant time was resident outside the UK. 
The Court of Appeal considered the arguments which had been put forward in favour of the view that HMRC’s powers stop at the UK border. These include the claim that schedule 36 is not intended to subvert the sovereignty of foreign states, and the fact that the wording does not state it can be used extra-territorially. 
The Court of Appeal decided in HMRC’s favour, meaning its powers to seek information from non-UK individuals about their tax affairs after they have left the UK have been confirmed. 
Tagged as: Court of Appeal, HMRC
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