In the recent case of Jimenez, the Court of Appeal held that HMRC has the power to send an information notice to a UK national and former UK resident who was at the time of sending the notice living in Dubai. This is part of a recent trend for English courts to support UK authorities’ assertion of extraterritorial information-gathering powers by applying a purposive and contextual interpretation to legislation granting those powers.

Case background

HMRC may issue a taxpayer notice under paragraph 1 of Schedule 36 (a Notice), requiring the provision of information or documents in order to assess a person’s tax position. Non-compliance may result in a civil penalty. Having become the subject of a HMRC investigation in respect of the historic period when he had been a UK taxpayer, Mr Jimenez was issued with a taxpayer notice at his residence in Dubai. He successfully challenged the Notice at first instance on the basis that it did not have extraterritorial effect and HMRC appealed.

Sufficient connection test

In allowing the appeal, the Court noted the absence of any express territorial limitation under Schedule 36 and applied the “sufficient connection” test set out in the September 2018 case of KBR (relating to the SFO’s information requests). In KBR, it was held that a notice under s 2(3) of the Criminal Justice Act 1987 (CJA) has extraterritorial effect where there is a “sufficient connection” between the overseas company and the UK (see here for our blog on that case). Patten LJ concluded that Mr Jimenez’s “identifiable relationship with the UK”, by virtue of being a person who is or may be liable for tax in the UK meant that the “sufficient connection” test was satisfied.

Public interest

The Court commented that:

the question [of extra-territorial effect] is likely to depend upon close examination of the interaction between any relevant principle of international law which would operate against giving the domestic legislation process some extra-territorial effect and the public interest considerations which favour a construction that involves the power being exercised in relation to persons outside the jurisdiction.

The court held that there was a strong public interest in HMRC being able to obtain information necessary to properly perform its public function. Patten LJ said that following the cases of Bilta[1] and KBR, if there was a sufficient national interest, “the jurisdiction to serve a notice requiring the provision of information from a person resident abroad or even to impose liability on the recipient will not raise eyebrows.” He said that there would need to be a “strong policy reason in the form of a relevant principle of international law” for such a provision to not have an extraterritorial effect.


The court’s interpretation of HMRC’s powers under Schedule 36 as having “the widest territorial reach that is consistent with international law” and adoption of the sufficient connection test may lead to other UK authorities testing the limits of their statutory information-gathering powers. This has been the case for some time in tax matters, as HMRC has been given ever-increasing powers to have access to information and documents held overseas.


[1] Bilta (UK) Ltd (in Liquidation) v Nazir [2015] UKSC 23