Income Tax Act 2007 section 242

Power to require information where section 240 or 241 applies or could have applied

Section 242 gives HMRC officers the power to demand information from individuals or companies where EIS-related reporting obligations may not have been met, or where certain transactions fell just below the thresholds that would have triggered those obligations.

• An HMRC officer can act where they believe a person has failed to provide a required notice under section 240 (investor obligations) or section 241 (issuing company obligations) in respect of a relevant event.
• The power also covers situations where value has been given or received that was classed as insignificant under section 215, and which therefore did not trigger a reporting requirement under section 216, but which HMRC still wish to investigate.
• Similarly, it applies where share capital repayments have been made or received that were disregarded as insignificant under section 225, meaning no notice was required under section 241, but HMRC nonetheless have concerns.
• The officer may issue a formal notice requiring the person to supply relevant information, but must allow at least 60 days for the person to respond.