Unannounced visit - HMRC accessing client's computer records

HMRC undertook an unannounced visit to a client’s hotel. The proprietor was away at the time but the operations manager provided assistance including allowing HMRC access to the computer systems to extract data on to a USB stick. Did HMRC have a right to do so when there was no director or proprietor on hand to give their consent?

The best course of action would have been to ask HMRC to return when the proprietor was present. However, the Inspection and Information Powers vested in HMRC by Sch36 FA2008 do cover the situation in Part 2 Carrying out inspections, paragraph 12(3)(b):
(b)    if the occupier of the premises is not present but a person who appears to the officer to be in charge of the premises is present, the notice must be provided to that person, and
(c)    in any other case, the notice must be left in a prominent place on the premises.
The legislation also continues at Part 3, paragraph 16(2):
(2)  Where a document is removed in accordance with sub-paragraph (1), the person who produced the document may request—
(a)    a receipt for the document, and
(b)    if the document is reasonably required for any purpose, a copy of the document,
and an officer of Revenue and Customs must comply with such a request without charge.
HMRC may have conducted the visit in accordance with the legislative provision; nevertheless, it is good practice to check how exactly the information was extracted. Our understanding of Data Handling Officer’s guidance is that the business owner will be directed to extract the details on to a USB, which is then copied to HMRC’s laptop with the USB returned to the proprietor given the data belongs to them. As a security issue, at no point should anyone from HMRC take control of the computer system to extract data themselves. Our advice is to check exactly how the matter was handled to establish whether there has been a breach of protocol.

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Found in: HMRC enquiries

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