In Ingenious Media Holdings and another v HMRC [2015] EWCA Civ 173 (4 March), the Court of Appeal found that HMRC had not breached any duty of confidentiality when discussing film schemes and their promoters with journalists.
Ingenious and its subsidiaries promoted film investment tax avoidance schemes. During an ‘off the record’ meeting with journalists from The Times, Mr Hartnett, then the Permanent Secretary for Tax, had discussed the affairs of Ingenious. The Times had then published extracts of the meeting, claiming that ‘off the record’ only meant that the source of the quotations could not be named.
Ingenious claimed that HMRC had breached the Commissioners for Revenue and Customs Act (CRCA) 2005 s 18 (duty of confidentiality), the European Convention on Human Rights (ECHR) art 8 (right to privacy) and art 1 of Protocol 1 of the European Convention on Human Rights (A1P1) (right to peaceful enjoyment of possession).
The Court of Appeal pointed out that a wide interpretation of HMRC’s function as that of raising tax revenue was appropriate when applying s 18. A factually correct disclosure not involving the private affairs of a taxpayer – and which had the effect of reducing the effect of tax avoidance schemes which HMRC genuinely considered ineffective – was a disclosure HMRC should be free to make. The court also rejected the contention that Mr Hartnett could have expressed HMRC’s concerns about film schemes without implicating Ingenious, which was known to be the main promoter of such schemes.
In addition, the court found no evidence of damage to reputation, in circumstances where Ingenious’ involvement in such schemes was known. Finally, in relation to A1P1, the court found that Ingenious’ claim that The Times’ revelations would lead to a loss of customs – i.e. loss of taxpayers investing in the schemes – did not come within the scope of A1P1. It was no more than a claim for loss of future income, without any expropriation by the state, and it was in the public interest for HMRC to express its view of such schemes.
Why it matters: The case confirms that HMRC can disclose information which it believes will assist it in its function of collector of taxes. The ‘naming and shaming’ provisions introduced by FA 2009 now also allow HMRC to disclose the identity of defaulting taxpayers and dishonest tax agents.
In Ingenious Media Holdings and another v HMRC [2015] EWCA Civ 173 (4 March), the Court of Appeal found that HMRC had not breached any duty of confidentiality when discussing film schemes and their promoters with journalists.
Ingenious and its subsidiaries promoted film investment tax avoidance schemes. During an ‘off the record’ meeting with journalists from The Times, Mr Hartnett, then the Permanent Secretary for Tax, had discussed the affairs of Ingenious. The Times had then published extracts of the meeting, claiming that ‘off the record’ only meant that the source of the quotations could not be named.
Ingenious claimed that HMRC had breached the Commissioners for Revenue and Customs Act (CRCA) 2005 s 18 (duty of confidentiality), the European Convention on Human Rights (ECHR) art 8 (right to privacy) and art 1 of Protocol 1 of the European Convention on Human Rights (A1P1) (right to peaceful enjoyment of possession).
The Court of Appeal pointed out that a wide interpretation of HMRC’s function as that of raising tax revenue was appropriate when applying s 18. A factually correct disclosure not involving the private affairs of a taxpayer – and which had the effect of reducing the effect of tax avoidance schemes which HMRC genuinely considered ineffective – was a disclosure HMRC should be free to make. The court also rejected the contention that Mr Hartnett could have expressed HMRC’s concerns about film schemes without implicating Ingenious, which was known to be the main promoter of such schemes.
In addition, the court found no evidence of damage to reputation, in circumstances where Ingenious’ involvement in such schemes was known. Finally, in relation to A1P1, the court found that Ingenious’ claim that The Times’ revelations would lead to a loss of customs – i.e. loss of taxpayers investing in the schemes – did not come within the scope of A1P1. It was no more than a claim for loss of future income, without any expropriation by the state, and it was in the public interest for HMRC to express its view of such schemes.
Why it matters: The case confirms that HMRC can disclose information which it believes will assist it in its function of collector of taxes. The ‘naming and shaming’ provisions introduced by FA 2009 now also allow HMRC to disclose the identity of defaulting taxpayers and dishonest tax agents.
