Can HMRC access my Bank Account?
Since June of 2021 when the Finance Act 2021 was passed, the answer is ‘yes’. HMRC can access the bank account of anyone that they suspect of tax evasion or tax fraud. HMRC can issue a ‘Financial Institution Notice’ that requires a third party, such as a bank or building society, to provide them with information in order that they can “check the tax position of a tax payer” or “recover a debt owed by a taxpayer”. There is no right of appeal and they can issue a Financial Institution Notice to a bank or building society without the taxpayer’s permission and without having to inform the taxpayer. They have also broadened their definition of Financial Institution to “anyone who issues credit cards”.
‘FIN’s represent a sweeping new power for HMRC compared to the ‘Schedule 36’ procedure that they used previously. Prior to June 2021 HMRC had to get permission either from you, the tax payer, or the Independent Tax Tribunal before they could get any transaction details from your bank. In reality, HMRC got permission to access the accounts of suspected fraudsters only 800 times or so in any one year. Statistically, that was only 1 in 13,750 of the 11 million Self Assessments submitted. So the answer used to be ‘no’ unless you were a major league criminal or fraudster. At this time there are no official reports of how often HMRC are using the new FINs, but it is believed to be already in the tens of thousands.
We are now on a different planet; if you get an HMRC Compliance Check, our advice is to provide your bank statements immediately when requested; at least this will give you the opportunity to explain your transactions and any mistakes that you may have made. If you refuse and HMRC issue a FIN to your bank, they are more likely to draw their own conclusions and issue fines or initiate civil proceeding to recover debts, or possibly start criminal proceedings for fraud.
Here’s the link to the HMRC page:-