Inland Revenue (Hansard, 7 November 2001)

§ Mr. Goodman
To ask the Chancellor of the Exchequer under what circumstances an employee of the Inland Revenue is permitted to make an inquiry about a person whose tax affairs were dealt with by another Inland Revenue office. [13216]

§ Dawn Primarolo
There are many circumstances in which an Inland Revenue officer may need to make inquiries about a taxpayer, some of whose affairs are dealt with by another office. For example, an officer dealing with a company's tax affairs may need information about individual directors. Or a formal inquiry into a tax return may be carried out at a different office from that which issued the return, depending on the availability of staff.
Staff are prohibited from making inquiries or searching for data about any taxpayer except in the performance of their official duties. But those duties may often take them across the boundaries of different offices.

§ Mr. Goodman
To ask the Chancellor of the Exchequer under what circumstances an Inland Revenue inquiry about a person's financial circumstances is entitled to lead to further inquiries about that person's immediate relatives(a) generally and (b) in respect of their financial affairs. [13215]

§ Dawn Primarolo
In a formal inquiry into a tax return, an officer is statutorily entitled to ask for information which he requires in order to determine whether the return is incorrect and, if so, to what extent. Information about relatives may be relevant to that inquiry. For example, in a case where the business records are incomplete, the best way to measure the true level of income may be to estimate the taxpayer's expenditure. In that case, information about the cost of maintaining dependent relatives and their contribution to household expenses may be relevant, and may be legitimately required by the investigator.
The results of any inquiry into one family member may show that there is a risk of tax evasion by another. There is no bar on the Inland Revenue using that information in deciding whether to inquire into the tax affairs of the second family member.