Guidance on Third Party Information Notices for Tax Position Checks

Revenue Scotland third party information notices

A third party information notice allows Revenue Scotland to require a person other than the taxpayer to provide information or documents to check a known taxpayer’s tax position. This power is limited by legal safeguards: the information must be reasonably required, it must be reasonable to ask that third party for it, and in most cases the notice must be approved by the taxpayer or the tribunal.

• Revenue Scotland can use these notices where relevant records are held by someone else, such as an adviser, bank, business contact, partner, or parent company.
• In most cases, a notice needs approval from either the taxpayer or the tribunal before it can be issued.
• Approval is not usually needed for certain group and partnership cases, such as notices to a parent undertaking about more than one subsidiary or to a partner about other partners.
• The taxpayer will normally be named in the notice and sent a copy, unless the tribunal allows this to be withheld because naming them or sending a copy could prejudice the assessment or collection of tax.
• Examples of possible prejudice include tipping someone off, collusion, intimidation, moving assets, disappearing, or destroying evidence.
• When assessing a notice, key questions include whether the taxpayer is identifiable, whether the request is clear and proportionate, whether the material is genuinely needed, and whether the correct approval and notification rules have been followed.

Scroll down for the full analysis.

Revenue Scotland third party information notices: what they are and when they can be used

This page explains when Revenue Scotland can require someone other than the taxpayer to provide information or documents. These are called third party information notices. They are an investigatory power, but there are legal safeguards around when they can be issued, who must approve them, and when the taxpayer must be told.

What this rule is about

A third party information notice allows Revenue Scotland to ask one person for information or documents in order to check another person’s tax position. In this context, the other person is the taxpayer whose affairs are being checked.

This matters because tax information is not always held by the taxpayer. It may be held by an adviser, bank, business counterparty, group company, or another person. The legislation therefore allows Revenue Scotland to go to that third party, but only where certain conditions are met.

The rule is not unlimited. Revenue Scotland must be able to show both that the information or documents are reasonably required to check a known taxpayer’s tax position, and that it is reasonable to require the third party to provide them.

What the official source says

According to Revenue Scotland’s guidance on the Revenue Scotland and Tax Powers Act 2014, a third party notice may be given where:

• the information or documents are reasonably required for checking the tax position of another person whose identity is known to Revenue Scotland; and
• it is reasonable to require the recipient of the notice to provide that information or produce those documents.

As a general rule, Revenue Scotland cannot issue a third party notice unless it has been approved by either:

• the taxpayer, or
• the tribunal.

There are two stated exceptions. Approval is not needed where the notice is given:

• to a parent undertaking, to check the tax position of more than one of its subsidiary undertakings; or
• to a partner, to check the tax position of one or more of the other partners.

The notice must normally name the taxpayer. The guidance then sets out modified naming rules for partnerships and corporate groups. In some cases, it is enough to identify the partnership by name or registration name, or to name the parent undertaking rather than each relevant company.

If the tribunal has approved the notice, it may also disapply the normal requirement to name the taxpayer, but only if it is satisfied that Revenue Scotland has reasonable grounds for believing that naming the taxpayer might seriously prejudice the assessment or collection of tax.

Revenue Scotland must normally give a copy of the third party notice to the taxpayer. Again, there are exceptions. A copy need not be given where:

• the tribunal has disapplied that requirement;
• the notice is given to a parent undertaking in relation to more than one subsidiary undertaking; or
• the notice is given to a partner in relation to one or more other partners.

The tribunal may disapply the requirement to send a copy to the taxpayer if it is satisfied that Revenue Scotland has reasonable grounds for believing that doing so might prejudice the assessment or collection of tax.

The guidance explains that in this setting, prejudice or serious prejudice means a risk, or serious risk, to the effective assessment or collection of tax. Examples given include the risk of:

• tipping off a person suspected of a criminal offence;
• collusion with or intimidation of a third party;
• flight or disappearance;
• assets being moved away; or
• destruction of evidence.

The guidance also says Revenue Scotland will try, where possible and practical, to obtain the information from the taxpayer first. But it may be inappropriate to do that if the taxpayer does not have the material or if Revenue Scotland needs an independent check of the facts.

What this means in practice

The key point is that Revenue Scotland can sometimes bypass the taxpayer and obtain material directly from someone else. But it cannot do this simply because it would be convenient. The request must be tied to checking the tax position of a known taxpayer, and the information requested must be reasonably required for that purpose.

The notice recipient should also pay attention to the separate requirement that it must be reasonable to require them to comply. That suggests the power is not just about relevance. It also involves whether the request is fair and appropriate as directed to that particular third party.

In most cases there is also a control mechanism before the notice can be issued: either the taxpayer agrees, or the tribunal approves. That is an important safeguard, especially where the taxpayer has not consented.

The naming and copy requirements are also significant. Usually, the third party will be told whose tax position is being checked, and the taxpayer will receive a copy of the notice. That promotes transparency. But where there is a real risk to tax collection or assessment, the tribunal can allow Revenue Scotland to withhold the taxpayer’s name or avoid sending the taxpayer a copy.

For partnerships and groups, the legislation is adapted so that notices can work at a practical level. Revenue Scotland does not always need to list every relevant partner or subsidiary individually if the statutory conditions for those special rules are met.

How to analyse it

If you are trying to understand whether a third party notice is valid or what it requires, the following questions are a sensible starting point:

• Whose tax position is being checked? The legislation assumes a known taxpayer, even if the taxpayer is not named in the notice because the tribunal has allowed that requirement to be disapplied.
• What information or documents are being demanded? The description should be clear enough for the recipient to identify exactly what is required.
• Are the requested materials reasonably required to check that taxpayer’s tax position? This is a relevance and necessity question, not a licence for a broad fishing exercise.
• Is it reasonable to require this particular third party to provide them? Consider who holds the material and whether the request is proportionate in context.
• Has the notice been properly approved? Usually that means approval by the taxpayer or the tribunal, unless one of the specific exceptions for parent undertakings or partners applies.
• Does the notice properly identify the taxpayer, partnership, or parent undertaking, as the case may be? If the taxpayer is not named, was tribunal approval obtained to disapply that requirement?
• Has a copy been given to the taxpayer? If not, does one of the statutory exceptions apply, or has the tribunal disapplied the requirement?
• Is there an obvious reason why Revenue Scotland may have gone to the third party first? For example, the documents may not be in the taxpayer’s possession, or Revenue Scotland may be seeking independent verification.

The source also notes that special rules apply to reviews and appeals concerning information notices. That means procedural rights may differ from what a reader expects in an ordinary tax dispute.

Example

Illustration: Revenue Scotland is checking the tax position of a company in a group. It believes relevant records are held by the parent undertaking rather than by the subsidiary itself. If the notice is issued to the parent undertaking for the purpose of checking the tax position of more than one subsidiary undertaking, the guidance says Revenue Scotland does not need approval from the tribunal or from the subsidiaries. In that situation, the notice can proceed under the special group rule.

By contrast, if Revenue Scotland wants information from an unrelated third party about a single taxpayer, it would usually need approval from the taxpayer or the tribunal before issuing the notice.

Why this can be difficult in practice

The source sets out the basic legal framework, but applying it can still be fact-sensitive.

First, terms such as reasonably required and reasonable to require are evaluative. They do not create a mechanical checklist. Disputes may arise about whether the request is too broad, whether the material is genuinely needed, or whether the wrong person has been targeted.

Secondly, the prejudice and serious prejudice tests depend heavily on the facts. Revenue Scotland may argue that telling the taxpayer would create a real risk to the investigation or collection of tax. The tribunal must be satisfied that there are reasonable grounds for that belief, but the underlying concerns may not always be visible to the third party receiving the notice.

Thirdly, the partnership and group rules alter the normal naming and approval requirements. Those rules are practical, but they can make the notice look unusual. A recipient should not assume a notice is defective simply because it refers to a partnership or parent undertaking in a more general way. The question is whether it fits within the special statutory wording described in the guidance.

Finally, the guidance is not itself the legislation. The legal force comes from the Revenue Scotland and Tax Powers Act 2014, particularly sections 124 to 126 and 128 to 129. The guidance is useful for understanding how Revenue Scotland says it will use the power, but the statute remains the primary source.

Key takeaways

• A third party information notice lets Revenue Scotland require someone other than the taxpayer to provide information or documents needed to check a known taxpayer’s tax position.
• The notice usually needs approval from the taxpayer or the tribunal, unless a specific exception applies for certain partnership or group situations.
• The taxpayer will usually be named and sent a copy of the notice, unless the tribunal allows those requirements to be disapplied because of a risk to the assessment or collection of tax.

This page was last updated on 24 March 2026

Useful article? You may find it helpful to read the original guidance here: Guidance on Third Party Information Notices for Tax Position Checks

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