Due Diligence – GDPR vs HMRC obligations. The Saga Continues

The issue:

HMRC require us to check up on seemingly every detail that we can find online about owners in our warehouse, without being specific or giving examples of what is too much.

HMRC can ask us for information about owners many years later and demand to see evidence that we’ve done our due diligecence. It seems that having a questionnaire which the owner reads, answers and signs is insufficient. We have the responsibility to notice anything unusual, at any time. For example, a private owner decides to sell a cask. Is this trading? Is it only trading if they buy another one? Clearly, the sale alone should not make you a trader. Perhaps you lost your job and you’re selling to get your money back. Perhaps you’re planning on selling a cask every year or two until you die and use the money the way people use their pension. Having money in an ISA and using the interest, doesn’t make you a banker does it?

The current solution:

As of 27/01/2021, we have beefed up our questionnaire with some more questions and included more references to HMRC notices that owners should read.

We will be much more rigourous in our enforcement of the requirement that current owners give us details of new owners in advance of making a sale, so that we can fully check the new owner.

We are awaiting further instruction on HMRC about which information they require us to keep, rather than just check. For example, we can check online and see in your Facebook page that you work for a private company. Should we keep proof that we’ve checked (for example a screenshot), or should we just write that we have checked and record nothing else. Without recording the information, if HMRC ask us in the future, we might as well just hand them a piece of paper that says “we checked, honest we did”.

A better solution would be that HMRC do the ownership checks themselves. Then they wouldn’t have to keep asking us for proof that we’ve done them.

For now, we’re going to continue opening accounts on a case by case basis. Some may be rejected, but the general aim will remain as it has always been, to allow as many people as possible the opportunity to own a cask.