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General information about compliance checks into tax advantaged share schemes

This factsheet tells you about compliance checks into tax advantaged share schemes. It’s one of a series. For the full list, go to ÌìÃÀÓ°Ôº and search ‘HMRC compliance checks factsheets’.

If you need extra support

If you have any health or personal circumstances that may make it difficult for you to deal with us, please tell the officer who contacted you. They’ll help you in whatever way they can. For more information about this, go to ÌìÃÀÓ°Ôº and search ‘get help from HMRC if you need extra support’.

You can also ask someone else to deal with us on your behalf, for example, a professional adviser, friend, or relative. However, we may still need to talk or write to you directly about some things. If we need to write to you, we’ll send a copy of our letter to the person you’ve asked us to deal with. If we need to talk to you, they can be with you when we do, if you prefer.

What are compliance checks

We carry out checks into schemes to make sure they meet the requirements for tax advantaged status. These schemes include:

• Schedule 2 Share Incentive Plan (SIP)
• Schedule 3 Save As You Earn (SAYE) option scheme
• Schedule 4 Company Share Option Plan (CSOP)
• Enterprise Management Incentives (EMI)

If we start a check, we’ll tell you what we’re checking. We’ll ask you to give us any information or documents that we may need. If you’re not sure why we’re asking for something, please tell us and we’ll explain why we need it.

Please tell us if you cannot do what we ask, or if you think something we’ve asked for is unreasonable or not relevant to the check. We’ll consider your reasons carefully and if we still think that we need it, we’ll tell you why.

The benefits of helping us with a check

If there’s something wrong, we’ll work with you to put it right. We’ll work with you to determine the amount of any additional tax, late payment interest and penalties that may be due. Working with us is likely to reduce the amount of any penalties that we may charge.

If you know or suspect that there’s something wrong, you must:

• tell us everything that’s wrong as soon as we tell you we’ve started a check
• work with us to calculate the right amount of tax

If we find something wrong that you didn’t know about, you must have given us as much help as we needed up to that point.

As soon as we tell you there’s something wrong, tell the officer dealing with the check everything about it.

Let them see any additional records they need and help them to work out the right amount of tax.

We may send you an information notice if we’ve:

• asked you for information or documents and you don’t provide them
• asked to visit your business premises to inspect your business records and you refuse

This notice would require you to give us the documents and information we need.

For more information read our factsheet CC/FS2, ‘Information notices’. To get this factsheet, go to ÌìÃÀÓ°Ôº and search ‘CC/FS2’.

How we work with large and complex businesses

The tax affairs of the largest and most complex businesses are looked after by the Large Business part of HMRC. Each business is a Customer Compliance Manager (CCM) because of their size or the complexity of their tax affairs. The CCM manages HMRC’s compliance activities and the relationship between the business and HMRC across all taxes and duties. Our CCMs work with these large business customers to identify, check and manage tax risk.

Our goal is to build an open and trusting relationship with these businesses. To do this, we’ll:

• be open and transparent in our dealings with you
• expect you to co-operate openly and transparently with us
• work with you to explore tax risks that we, or you, identify
• discuss any risks with you in the first instance, before considering the use of formal powers

We may however need to use our formal powers or issue an assessment notice under certain circumstances. For example:

• if you prefer a formal approach
• where a time limit for making an assessment is approaching
• if we’ve been unable to resolve an issue and need to formally request information from you
• if the issue is likely to be taken before an independent appeal tribunal for a decision

Please tell us if:

• we’ve asked you to do something and you need more time
• there’s something that you don’t agree with

If you disagree

If there’s something that you don’t agree with, please tell us. In most Large Business cases you should expect the CCM to work with you to resolve disputes.

If we make a decision that you can appeal against, we’ll write to you to about the decision and tell you what to do if you disagree. You’ll usually have 3 options. Within 30 days you can:

• send new information to the CCM dealing with the check and ask them to take it into account
• have your case reviewed by an HMRC officer who hasn’t been involved in the matter
• arrange for an independent tribunal to hear your appeal and decide the matter

You must do this within 30 days of our letter. For more information about appeals, go to ÌìÃÀÓ°Ôº and search ‘disagree with a tax decision or penalty’.

You may also be able to ask for an HMRC specialist officer to act as a neutral facilitator to help resolve the dispute. We call this Alternative Dispute Resolution (ADR).

ADR is only available for disputes that relate to particular tax areas. The officer dealing with the check will tell you if ADR is available for your dispute.

For more information, read our factsheet CC/FS21, ‘Alternative Dispute Resolution’. To get this factsheet, go to ÌìÃÀÓ°Ôº and search ‘CC/FS21’.

Your principal rights and obligations

You have:

• the right to be represented you can appoint anyone to act on your behalf
• an obligation to take reasonable care to get things right if you have an adviser, you must still take reasonable care to make sure that any returns, documents or details they send us on your behalf are correct

The ‘HMRC Charter’ explains what you can expect from us and what we expect from you. For more information, go to ÌìÃÀÓ°Ôº and search ‘HMRC Charter’.

Your rights if we’re considering penalties

We’ll tell you if there’s something wrong and we’re considering penalties.

To find out what rights you have when we consider penalties, read our factsheet CC/FS9, ‘The Human Rights Act and penalties’.

To get this factsheet, go to ÌìÃÀÓ°Ôº and search ‘CC/FS9’.

Use of open source material during a compliance check

We may observe, monitor, record and retain internet data which is available to anyone. This is known as ‘open source’ material and includes news reports, internet sites, Companies House and Land Registry records, blogs and social networking sites where no privacy settings have been applied.

More information

Our privacy notice

Our privacy notice sets out the standards that you can expect from us when we ask for information or hold information about you. Go to ÌìÃÀÓ°Ôº and search ‘HMRC Privacy Notice’.

If you aren’t happy with our service

Please tell the person or office you’ve been dealing with. They’ll try to put things right. If you still aren’t happy, they’ll tell you how to make a formal complaint.