Monitoring notices: procedure and publication
12.If a promoter fails to comply with a conduct notice then section 242 requires the authorised officer to apply to the Tribunal for approval to give a monitoring notice. A monitoring notice can only be issued if approval is granted by the Tribunal. The promoter must be given notice of the application. If the breach of the conduct notice related to the provision of information to customers or intermediaries, or to the promoter’s duty to supply information to HMRC, is insignificant then the authorised officer is not under a duty to apply to the Tribunal for approval and consequently a monitoring notice is not issued (subsection (3)). The monitoring notice will state the reasons for its issue, in particular the condition in the conduct notice that the promoter breached. An effect of a monitoring notice is that the promoter may be subject to specific information notices with penalties for non-compliance.
13.Section 243 provides that the Tribunal may only approve a monitoring notice if it is satisfied that it is justified. The promoter has the opportunity to make representations to the Tribunal including representations about the reasonableness of the conditions in the conduct notice which HMRC considers it to have breached. The Tribunal may amend the proposed monitoring notice. Subsection (3) allows the monitored promoter to include in its representations to the Tribunal about the proposed monitoring notice its view that a condition in the conduct notice was unreasonable. If the Tribunal decides that a condition in the conduct notice is unreasonable subsections (3) and (4) operate so that the Tribunal will not approve the giving of a monitoring notice for a breach of only that condition. If the proposed monitoring notice identifies a breach of more than one condition of the conduct notice then the Tribunal will only refuse to approve the giving of a monitoring notice if it holds that all of the conditions were unreasonably imposed (assuming it is accepted that there was a breach on the facts and that the giving of the monitoring notice would be a justified response to that breach).
14.Section 244 describes the content of the monitoring notice and how it is issued. The monitoring notice is issue by an authorised officer of HMRC. All monitoring notices must explain the effect of the monitoring notice (including the date it takes effect) and the right of the recipient to request the withdrawal of the monitoring notice. In addition a monitoring notice being issued for the first time must include the condition or conditions of the conduct notice that it is has been determined that the promoter has breached. If them monitoring notice is a replacement monitoring notice then it must refer to the original monitoring notice. A promoter who is subject to a monitoring notice is referred to as a monitored promoter.
15.Section 245 provides the monitored promoter with the right to request that the monitoring notice should be withdrawn. For example the promoter may consider that it has complied with all of its obligations as a monitored promoter and has satisfied all the conditions of the preceding conduct notice, so that the monitoring notice is no longer necessary. Subsection (2) ensures that all the consequences of a monitoring notice runs for at least 12 months. An authorised officer has 30 days to respond to the request and when considering whether or not to reject the request, takes into account the behaviour of the promoter while it was being monitored (subsection (5)), the promoter’s likely future behaviour and its compliance with this Part. In addition the authorised officer can, when deciding to withdraw the notice, decide to issue a follow-on conduct notice so that the promoter continues to be subject to some supervision.
16.The notification of the authorised officer’s decision on withdrawal of the monitoring notice is made under section 246. The authorised officer may decide to accept or reject the request for withdrawal, but if they do the latter they must give their reasons. A right to appeal against a refusal to withdraw a monitoring notice is in section 247.
17.Section 248 allows an authorised officer to publish the fact that a person is a monitored promoter. Publication can include the promoter’s name, address, the nature of its business and other appropriate information, including the conditions in the conduct notice that were breached. A promoter’s details cannot be published until their right to appeal against the Tribunal’s approval has been exhausted (subsections (5) and (6)). Additionally if a monitoring notice is withdrawn it is incumbent on the authorised officer to publish the fact of the withdrawal in the same way.
18.Section 249 complements section 248 by requiring a promoter to publish to its clients that it is a monitored promoter and which of the conditions in the conduct notice have been breached. For existing clients the promoter must publish that it is monitored within 10 days of its right to appeal the Tribunal’s approval being exhausted (subsections (4) and (5)). For new clients the ten day period applies from the date that they became new clients (subsection (9)). HMRC may make regulations requiring a promoter to publish on the Internet or in other publications or correspondence, such as marketing material and communications with clients, that it is a monitored promoter, the conditions in the conduct notice that it has breached and its promoter reference number (subsections (3) and (10)). The form and manner of the publication is to be prescribed in regulations.
