HMRC continue their quest to tackle promoters of marketed tax avoidance and one way they can now do so is through new information gathering powers under Finance Act 2026. The powers are wider-reaching than HMRC’s existing information powers so if you receive one it does not necessarily mean HMRC suspect that you are part of a tax avoidance scheme, however, the notices should be taken very seriously as they can come with punitive penalties for non-compliance.
What is the new Anti-avoidance information notice (AAIN)?
As of 18 March 2026 when Finance Act 2026 received Royal Assent, HMRC have new information notice powers to obtain information and documents where HMRC reasonably suspect a person is connected with the promotion or facilitation of tax avoidance. It is effectively therefore a new information gathering tool, in addition to HMRC’s existing powers under Schedule 36 Finance Act 2008.
Importantly, the use of an AAIN is not dependent on proof of a tax loss, or finding that a tax scheme is ineffective. The purpose of these new information powers is to investigate activities related to the promotion of tax avoidance and this means an individual or business may receive an AAIN even though they are not directly involved in any tax avoidance scheme as a taxpayer or promoter.
An AAIN can include a request for documents that originate not more than six years before the notice, but this is not a limitation period as an authorised HMRC officer can permit a longer lookback period. However, the information requested must remain reasonably required, and the time limits of the underlying anti-avoidance enactment remain relevant.
WHO MIGHT RECEIVE AN AAIN?
There are five categories of AAIN, as follows:
Connected person notices
A connected person is someone that HMRC reasonably suspect is or has been contravening an anti-avoidance enactment, or is connected to a person contravening an anti-avoidance enactment. The definition of connection is wide, but could include for example a company and its directors; a partnership and its members; or something as broad as a connection between two people where one is accustomed to taking instructions from the other.
No approval is required by HMRC to issue this notice, but they have the option to obtain tribunal approval and may do so where they suspect the notice might be challenged, for example if the scope of the notice is far-reaching.
Third-party notices
Like a Schedule 36 information notice, HMRC have to obtain agreement from the connected person, or otherwise obtain tribunal approval, before issuing an AAIN to a third-party.
Unidentified connected person notices
Unidentified connected person includes a connected person where the identify is not known, or a class of people where all the individual identifies are not known to HMRC but at least one member of that group is a connected person. HMRC have to obtain tribunal approval in this case, and the information notice can only require information that HMRC cannot readily obtain from other sources.
Identification notices
These notices are limited to requiring identifying information, such as name, address, and date of birth, where this information is not already available to HMRC from another source. This type of notice might be issued where HMRC have an ‘unidentified connected person’ as above. To send this type of notice HMRC first need approval of either an authorised officer or the tribunal.
Financial institution notices (FIN)
This is an information notice sent to a financial institution such as a bank or credit card issuer. Approval from the tribunal must be obtained before HMRC can issue a FIN which is different to a Schedule 36 FIN where tribunal approval is not mandatory. Similarly to Schedule 36 however, HMRC will ordinarily have to supply the connected person with a copy of the notice and a summary of the reasons for requesting the information.
What will the AAIN contain?
Each AAIN must be very specific and will depend on the type of notice as above, but every notice will need to include what information HMRC are requesting, how this should be provided to HMRC, a note of the statutory provision (this will be Finance Act 2026 and the section will depend on the type of notice), and whether there is tribunal approval or not. It also has to contain a ‘reasonable’ deadline to comply. Usually HMRC offer 30 days to respond to information notices before imposing penalties.
What should I do if I receive a notice?
Firstly, you should take any kind of information notice seriously, and make a note of the deadline. If you miss the deadline to respond to a notice, you will likely receive a penalty. The fixed initial penalty for non-compliance is £300 for FINs, but £5,000 for any other type of notice. This is a lot more than the £300 for failure to complying with a Schedule 36 information notice. There are subsequent daily penalties and again these are more stringent, being £60 for FINs but £1,000 for each day for all other types of notice.
There are further penalties for concealing information, or providing inaccurate information, with penalties of up to £20,000 for each type of offence. It is an offence, for example, to receive a notice, and then destroy or dispose of the information that HMRC have requested.
If you believe that HMRC have requested information that is not reasonably required, or if the request is unduly onerous or not in your possession or power to provide, then it may be possible to appeal the notice. Appeals can be made against any notice, unless tribunal approval has already been granted to HMRC, in which case the notice must be complied with and there is no scope to appeal.
Appeals can also be made against penalties if there is a valid reasonable excuse for the failure to comply.
If you have any concerns regarding an AAIN, or if you are involved in a tax avoidance scheme and need support settling with HMRC, please contact the Menzies Tax Disputes and Disclosures team for confidential advice.
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