A Schedule 36 information notice is a formal demand from HMRC, under Schedule 36 of the Finance Act 2008, requiring you to provide information or produce documents so HMRC can check your tax position. Ignoring one is expensive: a £300 penalty for not complying, then up to £60 a day for continued non-compliance, and up to £3,000 for each inaccuracy in what you provide. Some notices can be appealed. A notice approved in advance by the tribunal cannot.

Most compliance checks run on informal requests, and most of the time answering informally is the sensible course. The notice is what HMRC reaches for when it wants the request to carry legal force. Understanding what a notice can and cannot demand is the difference between cooperating sensibly and handing over more than the law requires.

What a notice compels

An information notice requires a person to provide information or produce documents that are reasonably required to check a tax position or collect a tax debt. It can be addressed to you about your own tax, or to a third party about someone else’s.

The notice will state what is wanted and the time allowed for providing it. Complying means providing what the notice actually asks for, within that time, in the form asked for.

What a notice cannot demand

The limits matter as much as the power. HMRC cannot use an information notice to demand material you do not possess and cannot reasonably obtain, documents prepared for a tax appeal, or communications protected by legal professional privilege between a lawyer and client. There are also protections for material created by auditors and tax advisers in their professional capacity, and restrictions on demanding material relating to a person who died more than four years earlier.

Anything outside the notice’s scope is a matter of choice, not obligation. This is precisely where advice earns its fee: an experienced adviser knows which requests exceed the power and how to push back without turning the check adversarial.

Appeal rights

Whether you can appeal depends on the type of notice. A notice that has been approved in advance by the independent tribunal cannot be appealed, because a judge has already decided that what HMRC is asking for is appropriate. A notice asking only for statutory records also cannot be appealed.

Other notices can be appealed, and an appeal is the formal route where a notice overreaches and correspondence has not fixed it.

The penalties

Failing to comply with a notice brings an initial £300 penalty. If non-compliance continues, daily penalties of up to £60 a day can follow. Providing inaccurate information or documents in response to a notice carries a penalty of up to £3,000 for each inaccuracy.

A penalty is not charged where there is a reasonable excuse, such as serious illness or bereavement, and the failure is put right without unreasonable delay once the excuse ends.

What it costs in practice

A Schedule 36 notice converts a request into a project with a deadline. The documents have to be found, reviewed before they go, and checked against the notice’s scope, and that review is professional time billed to you. None of it is recoverable from HMRC, whatever the outcome of the check.

This is one of the situations tax fee protection insurance exists for: the defence cost arrives regardless of whether any tax was ever at stake.

Common questions

Do I have to comply with a Schedule 36 information notice?

Yes, unless it is successfully appealed or withdrawn. Non-compliance carries a £300 penalty and then up to £60 a day, and inaccuracies in what you provide can cost up to £3,000 each.

Can I appeal an information notice?

Sometimes. A notice approved in advance by the tribunal cannot be appealed, and nor can a notice that asks only for statutory records. Other notices can be.

Can HMRC demand letters between me and my solicitor?

No. Communications protected by legal professional privilege are outside the power, as are documents prepared for a tax appeal.

What counts as a reasonable excuse for not complying?

Something outside your control, such as serious illness or the death of someone close, provided you comply without unreasonable delay once the situation ends. Pressure of work or reliance on a busy adviser rarely qualifies.

Does tax fee protection insurance cover dealing with an information notice?

Where the notice arises in a compliance check the policy covers, the professional time spent responding is normally the core of what is insured. As always, the check must have begun while cover was in force, and the wording decides the detail.

Related guides

This page explains HMRC information notices under Schedule 36 Finance Act 2008. It is general information, not tax or legal advice, and it does not describe the terms of any particular insurance policy.

Solar Insurance Services (Medway) Limited is registered in England and Wales, company number 05439438, and is authorised and regulated by the Financial Conduct Authority, firm reference number 459582.

Sources: HMRC compliance checks factsheet CC/FS2, Information notices; HMRC Compliance Handbook CH221000 on information powers.