What is a third party notice under section 124 of the Revenue Scotland and Tax Powers Act 2014?

A third party notice under section 124 allows a designated officer of Revenue Scotland to require someone other than the taxpayer — such as a bank, employer, or solicitor — to provide information or produce documents relevant to checking a specific taxpayer's tax position under United Kingdom law.

What conditions must be met before a third party notice can be issued under section 124?

Two conditions must be satisfied. First, the officer must reasonably require the information or document to check the tax position of a taxpayer whose identity is already known. Second, it must be reasonable for the third party to be asked to comply, meaning the request must not be disproportionate or unduly burdensome.

Does a third party notice under section 124 have to name the taxpayer?

As a general rule, the notice must name the taxpayer whose tax position is being checked. However, if the tax tribunal has approved the notice and specifically disapplied the naming requirement, the notice may be issued without naming the taxpayer, for example where disclosure could prejudice the investigation.

Can Revenue Scotland use section 124 to obtain documents from a solicitor?

Yes. A designated officer may issue a third party notice to a solicitor requiring production of documents relevant to a taxpayer's affairs, such as property transaction records for Land and Buildings Transaction Tax purposes. The officer must be satisfied the documents are reasonably required and that the request to the solicitor is reasonable.

Revenue Scotland and Tax Powers Act 2014 section 124

Power to obtain information and documents from third party

Section 124 gives a designated officer of Revenue Scotland the power to require a third party to provide information or produce documents for the purpose of checking another person's tax position.

A designated officer may issue a notice to a third party requiring them to provide information or produce a document relating to another person's tax affairs.
The information or document must be reasonably required for checking the tax position of a taxpayer whose identity is already known to the officer.
It must also be reasonable for the third party to be asked to provide the information or produce the document.
The notice must name the taxpayer it relates to, unless the tribunal has approved the notice and specifically waived this naming requirement.

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