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Can HMRC’s tentacles reach overseas?

We all understand that HMRC can demand any information they want regarding your tax arrangements. But, what if you’re no longer a UK resident? Does the same apply?

Since the 2008 Finance Act, HMRC can require you to let them have any information or documentation that they ‘reasonably require’ to check your tax position. Once they send you a ‘Schedule 36 Notice’, you must comply. If you don’t, there will be penalties.

But for expatriates?

Now here the waters are muddy and HMRC have done little to clear them. Perhaps unsurprisingly, they’ve always assumed that they can issue a Schedule 36 notice to anyone who was once a UK taxpayer, even if they are now permanently non-resident.

Then came the case of Jimenez versus HM Revenue & Customs and Other [2017]. Jimenez had been a resident UK tax payer who left the UK in 2002. He first moved to Cyprus and then on to Dubai. He regularly co-operated with HMRC. In 2012, HMRC opened up an enquiry into the nine-year period since he ceased being a UK resident. They issued a Schedule 36 Notice. But, Jimenez, believing the notice couldn’t be applied outside the UK, sought a judicial review.

Think again, HMRC

The High Court agreed with Jimenez. They judged that the correct way to approach Jimenez wasn’t via issuing a Schedule 36 Notice. Instead, they should have applied through the reciprocal co-operation agreement, already in place between the UK and Cyprus and Dubai respectively.

In conclusion – if you’re a former UK resident and HMRC issue you with a Schedule 36 Notice, ignore it. Simply refer HMRC to the Jimenez judgement. If they try and impose a penalty for non-compliance, appeal. Use the justification that they issued the notice unlawfully.


This legal information is not the same as legal advice and you may not rely on our post as a recommendation of any particular legal understanding. Pease, consult an attorney if you’d like to get an advice on your interpretation of this article.