Schedule 36 paragraph 5: HMRC's unknown-taxpayer information notice (UK 2026)

When HM Revenue & Customs wants information about a named person, the route is a paragraph 1 (taxpayer) or paragraph 2 (third-party) notice under Schedule 36 of the Finance Act 2008. But what if HMRC suspects undeclared tax but does not yet know whose tax it is — only that a particular letting agent, online platform or bulk-data holder is sitting on records that would identify the taxpayers?

That is where paragraph 5 of the same Schedule comes in: the unknown-identity information notice, often called the "fishing-expedition" notice in tax practice. Paragraph 5 (and its 2012 sibling, paragraph 5A) is procedurally distinct from the rest of Schedule 36 in three important ways — and a recipient who treats it as if it were a paragraph 2 third-party notice will mishandle the appeal.

This piece walks the statutory mechanics in plain English. It is general information, not tax or legal advice — speak to a qualified adviser before acting.

What paragraph 5 actually says

The full text of paragraph 5(1) of Schedule 36 FA 2008 reads:

An authorised officer of Revenue and Customs may by notice in writing require a person — (a) to provide information, or (b) to produce a document, if the condition in sub-paragraph (2) is met.

Sub-paragraph 5(2) sets that condition: the information or document must be reasonably required by the officer for the purpose of checking the tax position of, or collecting a tax debt of —

• (a) a person whose identity is not known to the officer, or
• (b) a class of persons whose individual identities are not known to the officer.

Limb (b) is the bulk-data route. It is the statutory hook HMRC uses when going to letting agents, short-let platforms, conveyancers, or financial intermediaries for whole-cohort records.

The "or for the purpose of collecting a tax debt" wording was inserted by section 127 of the Finance Act 2021. Before that, paragraph 5 was confined to checking the tax position; after FA 2021, the same notice route is available for collecting an established debt against persons whose identity is still unknown.

What paragraph 5A adds (FA 2012)

Paragraph 5A, inserted by section 224 of the Finance Act 2012, addresses a slightly different fact pattern: HMRC does hold information from which the taxpayer's identity can be ascertained, but cannot ascertain it itself, and a third party (typically a business that dealt with the taxpayer in the course of its trade) can.

The paragraph 5A test has four conditions:

Under paragraph 5A(6), the "relevant information" HMRC can demand is narrowly defined: name, last known address, and (for individuals) date of birth. The 5A route is therefore an identity-ascertainment notice — much narrower than the full information demand available under paragraph 5.

Three procedural points that make paragraph 5 different

A paragraph 5 notice is not a sub-flavour of the paragraph 2 third-party regime. It runs on a separate procedural track, and the differences matter for any recipient considering challenge.

1. No taxpayer-agreement route to issuance

A paragraph 2 third-party notice can be given on either of two foundations (paragraph 3(1)): the taxpayer's agreement or tribunal approval. A paragraph 5 notice has only one route: tribunal approval (paragraph 5(3)).

That is structural rather than procedural. There is no identified taxpayer whose agreement could be sought — the entire point of the regime is that the officer does not yet know who the taxpayer is. The taxpayer-agreement limb of paragraph 3(1) cannot fit and is not extended to paragraph 5.

2. No paragraph 4 copy-to-taxpayer requirement

A paragraph 2 notice carries a paragraph 4 obligation: the officer must give a copy of the notice to the taxpayer (subject to a separate tribunal disapplication route under paragraph 4(2) if doing so might prejudice assessment or collection).

Paragraph 4 does not apply to a paragraph 5 notice. Again the reason is structural: there is no identified taxpayer to whom a copy could be sent.

3. Tribunal approval may be sought without notice

Paragraph 5(3A), inserted by Finance Act 2009, allows the tribunal-approval application to be made without notice — the recipient of the prospective notice does not have to be heard before the tribunal sanctions issuance. The application is ex parte by statutory permission.

This contrasts with paragraph 3 (third-party notices), where representation rights for the third party (paragraph 3(3)(c) and (d)) are part of the tribunal-approval pre-conditions. A paragraph 5 recipient typically first learns of the notice when it lands — after tribunal approval.

The four-prong tribunal approval test

Tribunal approval under paragraph 5 is not a rubber stamp. Paragraph 5(4) sets a four-prong test that the tribunal must be satisfied on before approving:

Two points are worth noting. First, limb (b) was widened by the Finance Act 2011 to cover failures under foreign tax law as well as UK tax — supporting HMRC's information exchange role under double-taxation treaties and CRS-style automatic exchange. Second, limb (d) is a genuine subsidiarity test: if the officer can get the same information from the Land Registry, Companies House, or another HMRC-held data source, the paragraph 5 route is not available.

The appeal route — paragraph 31, "unduly onerous"

Schedule 36 paragraph 31 sets the appeal route for paragraph 5 and 5A notices in a single sentence:

Where a person is given a notice under paragraph 5 [or 5A], the person may appeal against the notice or any requirement in the notice on the ground that it would be unduly onerous to comply with the notice or requirement.

Three features of this appeal route are worth highlighting against the more familiar paragraph 30 (third-party notice) route:

• One ground only — "unduly onerous". The appellant cannot reopen the tribunal's earlier finding under paragraph 5(4) that the notice was "reasonably required" or that the officer had "reasonable grounds for believing" non-compliance.
• Only the recipient has standing. There is no notion of a "taxpayer" appeal alongside the recipient's appeal — there is no identified taxpayer in the regime.
• No statutory-records carve-out — paragraphs 29(2) and 30(2) carve statutory records out of taxpayer- and third-party-notice appeals, but paragraph 31 contains no equivalent carve-out for paragraph 5/5A notices. In practice, however, the "unduly onerous" ground is the only substantive ground available on which to argue.

The First-tier Tax Tribunal jurisprudence on "unduly onerous" under paragraph 30 (third-party notices) is read across to paragraph 31 in practice. Factors a tribunal has weighed include the volume of documents demanded, the time horizon, the cost of compliance against the recipient's turnover, the technical practicality of pulling the records, and the proportionality between burden and the likely tax at stake.

Where you see paragraph 5 notices in property practice

In a UK property-tax context, the paragraph 5 / 5A route shows up in four broadly identifiable settings:

1. Letting agents and short-let platforms. HMRC's "let property" campaign and successor outreach use bulk-data notices to letting agents and the major short-let platforms to identify landlords who have not declared rental income. The recipients are typically corporate intermediaries; the unidentified taxpayers are individual landlords. Paragraph 5A is the more natural fit here because the platforms hold identifying information (account holders' names and addresses) that HMRC can use to cross-check against income-tax records.
2. Conveyancing platforms and property data aggregators. Bulk identification of vendors in pre-completion-date offshore companies, lateral conversions, or other unusual transactional patterns.
3. High-value-residential / ATED enforcement. Identification of beneficial owners behind corporate structures sitting at or above the ATED bands.
4. Cross-border informants. The FA 2011 extension of paragraph 5(4)(b) to foreign tax law non-compliance allows HMRC to operate paragraph 5 powers in support of treaty-partner enquiries and the CRS-style information-exchange regime.

The scale matters. Across England and Wales, Homecost's Land Registry data shows 848,775 residential transactions registered in 2025 alone, of which 843,263 were above the £40,000 SDLT-reporting floor. Even modest non-compliance rates within that population are an enforcement target that case-by-case paragraph 1 notices could never reach — paragraph 5 is the volume tool.

If you want to anchor the procedural points to a concrete worked example, the Homecost postcode tool for M1 1AE shows the kind of per-transaction data that sits in Land Registry pp-complete and is, in principle, available to HMRC via cross-government data sharing — a relevant subsidiarity factor under the paragraph 5(4)(d) "not readily available from another source" limb.

What a paragraph 5 notice typically asks for

The text of a paragraph 5 notice will name the recipient (the third party), state the statutory basis, and set out the information or documents required. Common requests in a property setting include:

• Customer or account-holder schedules for a defined class — e.g., all landlords using a letting agent for a tax year.
• Transaction-level records matching defined characteristics — e.g., all property sales above a price threshold for a postcode area.
• Bank or payments records identifying recipients of rental flows.
• Conveyancing-file metadata identifying the parties to transactions of a specified type within a time window.

The notice will set a deadline for compliance — typically 30 days from issue, though longer windows are common for bulk data extractions. The deadline can be extended by HMRC, and an "unduly onerous" appeal under paragraph 31 must be lodged within 30 days of the notice being given (FA 2003 / Schedule 36 part 5 standard appeal-window rules).

Penalties for non-compliance run on the day-rate stack

A paragraph 5 notice attracts the standard Schedule 36 day-rate penalty stack on failure to comply:

Reasonable-excuse defences under paragraph 45 apply in the usual way. The detail of the day-rate stack and the appeal route for the penalties themselves is the subject of a separate piece — Schedule 36 information notice penalties for SDLT.

How paragraph 5 fits in the wider Schedule 36 picture

For procedural orientation, paragraph 5 sits alongside the more familiar tools and the document-destruction offence that closes out the Schedule:

The procedural-mapping piece SDLT enquiry windows and HMRC compliance check letters sets out where information notices generally sit in the sequence of an enquiry, and the paragraph 2 third-party notice mechanics piece covers the more common paragraph 2 route in detail. The paragraph 50 tax-related penalty piece covers the document-destruction offence at the end of Schedule 36.

For more on the wider category, browse cost-intelligence guides on Homecost.

Practical takeaways

A few orientation points for someone in receipt of a paragraph 5 or 5A notice:

• The tribunal-approval check has already happened — challenge through the para 31 "unduly onerous" route, not by attacking the underlying "reasonably required" finding.
• The data demand may be wide on its face but the four-prong tribunal test, particularly the limb (d) "not readily available from another source" condition, gives leverage in negotiating scope with HMRC pre-appeal.
• The thirty-day appeal window runs from the date the notice is given — not the date it is opened or read.
• The day-rate penalty stack runs from failure; engaging proactively with HMRC on scope reduction is usually less costly than running the clock on day-rate penalties.
• An "unduly onerous" appeal succeeds or fails on the quality of the cost-of-compliance evidence the recipient is able to lay before the tribunal — file notes, IT-system limitations, staff hours, and the proportion of the recipient's records the demand actually reaches.

This is general information about the procedural framework of Schedule 36 paragraph 5, not advice on any particular notice. Anyone in receipt of a paragraph 5 or 5A notice should consult a chartered tax adviser or specialist solicitor — the appeal window is short and the cost of getting the procedural sequence wrong is meaningfully larger than the cost of early advice.