894 Returns of certain information by third parties

Summary

This section places a responsibility on certain persons or “third parties” (called “relevant persons”) to make certain returns of information by a specified date. The returns in question already have to be made under various sections of the Tax Acts (the “specified provisions”) but only when requested to do so by notice from an inspector. This section shifts the onus for making the return onto the relevant person without the issue of a notice from the inspector.

The information to be supplied under this procedure is that which would be required in a return to be provided under the “specified provisions”.

This shift in responsibility is in line with the major change in the compliance culture brought about by the introduction of Self Assessment whereby taxpayers must now file returns by a stipulated filing date without notification from the inspector.

The original right of the inspector to obtain a return by notice to the person concerned is preserved and the inspector is given power to remove the obligations of this section entirely from a person for a period or to modify those obligations where it seems appropriate.

The application in practice of this provision is covered by Statement of Practice, SPIT/1/92 dealing with “Returns of Certain Information – Third Party Returns” and regard should be had to the contents of that Statement at all times.

Details

(1) “appropriate inspector” is the inspector to whom the return in question is to be made. He/she is, firstly, the inspector who has indicated to the person making the return that the return should be made. If the person who is to make the return has not been so notified, he/she should make it to the inspector to whom it is customary for that person to deliver any return, statement, list or declaration. Finally, as a default option, the return is to be made to the inspector of returns (as specified in section 2)

“chargeable period”, for a company, means its accounting period and, for all other cases, it means a year of assessment.

“specified provisions” are paragraphs (d) and (e) of section 888(2) and sections 889, 891, 891A and 892. These sections deal with the following returns —

• section 888(2)(d) and (e): returns from letting agents,
• section 889: returns of fees and commissions paid,
• section 890: returns of income received belonging to others,
• section 891: returns of interest paid or credited,
• section 891A: returns of interest payments to non-residents,
• section 892: returns by nominee holders of securities.

“specified return date for the chargeable period” identifies the date on or before which the return must be made for each chargeable period.

(2)(a) A relevant person is a person who is required to make a return under this section. This is any person who has information of a kind, makes a payment of a kind, pays or credits interest of a kind or is in receipt of money or value or profits or gains of a kind referred to in any of the specified provisions.

Certain persons are, however, excluded from the obligation to make returns. These are —

• (2)(c) any person who is not the beneficial owner of the securities referred to in section 892 (the purpose of section 892 is to get behind nominee holders of securities and find out who the beneficial owners are and, but for this exclusion in this section, every holder of a security, even those who are the beneficial owners themselves, would be required to make the return).

(2)(e) Although a person may be excluded as a relevant person in relation to information, etc, under one of the specified provisions, that person may be a relevant person in relation to another specified provision.

(3) Every relevant person is to make a return for the chargeable period (that is, year of assessment or accounting period, as appropriate) setting out all the matters and particulars as would be included in a return made under the specified provision itself. The return must be made on or before the specified return date.

Of course, if a person has information or makes or receives payments relating to more than one of the specified provisions, he/she must make a separate return under each provision.

(4) The inspector may by notice in writing relieve a person for one or more chargeable periods from the obligation to make a return under the section.

(5) The inspector is also permitted to relieve a person from the obligation to make a full return by confining the return to a particular type of information or payment. In this instance, such a partial return satisfies the requirements of the section.

(6) The inspector’s right to seek a return by notice under the specified provisions themselves is not overruled by the obligation placed on the person by this section. Conversely, the issue of a notice under one of the specified sections does not overrule the obligations on a person under this section.

(7) The penalty provisions of sections 1052 and 1054 apply to the failure to file a return under this section.

Relevant Date: Finance Act 2019