Legislation Day 2026: Reform of HMRC’s statutory information and inspection powers

HMRC are increasingly using their information and inspection powers.

On 13 July 2026, HMRC published draft legislation for inclusion in Finance Bill 2026-27 introducing reforms which extend and modernise these powers and the documents that can be sought by HMRC. The changes will affect:

• taxpayers who are the subject of information requests, including personal representatives of deceased taxpayers;

• third parties and intermediaries (including software providers) who hold or manage relevant tax information of taxpayers using digital systems or cloud-based services; and

• service and asset providers such as financial services (including banks) and crypto asset platforms.

During the 12 months ending March 2025, HMRC issued over 1,000 information notices to financial institutions, highlighting HMRC’s increasing use of its powers under Schedule 36 Finance Act 2008 (“Schedule 36”). The new reforms suggest HMRC is likely to make even greater use of these powers to source information and documents from taxpayers in future.

The draft legislation will be subject to technical consultation until 7 September 2026.

HMRC’s powers

HMRC are introducing reforms to modernise their civil information and inspection powers under Schedule 36 and section 114 of the Finance Act 2008 (“Section 114”).

Schedule 36 permits HMRC to issue notices requiring the provision of information and documents. The core information notices (which may be challenged by taxpayers) include:

• Taxpayer Notices;

• Third Party Notices;

• Financial Institution Notices (“FINs”); and

• Identity Unknown Notices and Identity Not Fully Known Notices (“Identification Notices”).

Section 114 enables HMRC to access computers used in connection with documents required by HMRC and to require reasonable assistance for the purposes of such access.

Reforms

The reforms, which will have effect on and after the date of Royal Assent to Finance Bill 2026-27, include the following.

• Amendments to the time limit for issuing an information notice for the purposes of checking the tax position of a person who is deceased. This is to allow HMRC to issue an information notice after four years (which is the time period currently allowed).

• Expanding the scope of FINs to capture businesses that provide services relating to crypto assets and payments in connection with those services. This widening will impact crypto platforms that market themselves on anonymity.

• Removing the statutory requirement to produce the annual report on HMRC’s use of FINs (although HMRC have indicated they will continue to publish FIN data for transparency and scrutiny).

• Changing the process for issuing an Identification Notice and updating the types of identifying information that can be requested. This is to allow any HMRC officer (as opposed to only an “authorised officer”) to issue the notice and to extend the identifying information that can be requested to include unique identifiers such as National Insurance numbers and email addresses.

• Updating Section 114 to clarify references to information held in digital and electronic form, so that it “works effectively in a modern, digital tax system”. This is to enable HMRC to obtain relevant information held within digital systems, including information about how relevant tax figures have been produced. This reform will enable HMRC to request information in a wider variety of formats.

All changes will be subject to proportionate safeguards, which HMRC say will balance the protection of taxpayers and third parties against HMRC’s need to access information. Existing statutory safeguards, such as the condition that information or documents are reasonably required to check a tax position, will continue to apply.

Each notice should be considered in the context of the particular facts in which it is issued and the information and documents sought, and consideration should be given to the merits of challenging or seeking to narrow the scope of the notice, where appropriate.

Those who receive Schedule 36 notices should consider the basis on which they are made, the information and documents sought (particularly whether these are “reasonably required”), and potential routes of challenge. The Eversheds Sutherland tax disputes team can advise on this.

Further information

For further information on HMRC’s information and inspection powers, please contact any of the members of Eversheds Sutherland’s tax disputes team set out below.