Income Tax Act 2007 section 243

Power to require information in other cases

Section 243 gives HMRC officers the power to require information from relevant persons where they have reason to believe that a claim for Enterprise Investment Scheme (EIS) relief may not be due because of certain tax avoidance arrangements, pre-arranged exits, disqualifying arrangements, or failures to meet ongoing qualifying conditions.

• Where HMRC suspects EIS relief may be invalid due to tax avoidance schemes, pre-arranged exits, disqualifying arrangements, or breaches of qualifying conditions, an officer may issue a formal notice requiring information from relevant persons
• The notice must allow at least 60 days for a response, and the recipient must provide a written declaration as to whether any such arrangement or scheme exists or has existed, along with any other information the officer reasonably requires
• The identity of who can be required to provide information depends on the type of concern — it may include the claimant, the company, persons controlling or connected with the company, or suspected parties to disqualifying arrangements
• Where EIS relief has been obtained or claimed, anyone receiving payments or assets from the company that could constitute value received, or anyone holding shares on behalf of another person, must disclose the identity and address of the ultimate beneficiary if asked by HMRC