Good Law Project Ltd v Commissioners for HM Revenue and Customs
| Jurisdiction | England & Wales |
| Judge | Mrs Justice Lieven DBE |
| Judgment Date | 19 November 2019 |
| Neutral Citation | [2019] EWHC 3125 (Admin) |
| Date | 19 November 2019 |
| Court | Queen's Bench Division (Administrative Court) |
| Docket Number | Case No: CO/2150/2019 |
[2019] EWHC 3125 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Mrs Justice Lieven DBE
Case No: CO/2150/2019
and
Mr Christopher Knight (instructed by Irwin Mitchell LLP) for the Claimant
Mr Nigel Pleming QC and Ms Eleni Mitrophanous (instructed by the General Counsel and Solicitor for HMRC) for the Defendant
Mr Sam Grodzinski QC (instructed by Herbert Smith Freehills LLP) for the Interested Party
Hearing dates: 6 November 2019
Approved Judgment
The Honourable
This is an application by Her Majesty's Revenue and Customs (HMRC) for a court order under s.18 of the Commissioners for Revenue and Customs Act 2005 (CRCA). The application arises in a judicial review brought by Good Law Project Limited (GLP) challenging the failure of HMRC to raise a “protective assessment” on the Interested Party (Uber) to VAT. In outline GLP claim that HMRC appreciate that Uber may be liable to account for VAT, or that there is a risk of underpaid VAT, and argues that HMRC should therefore raise a protective assessment, in order to avoid each successive VAT period becoming time-barred.
HMRC were represented before me by Mr Pleming QC and Ms Mitrophanous, GLP by Mr Knight, and Uber by Mr Grodzinski QC. I am extremely grateful to all of them for their assistance.
The claim was filed on 28 May 2019. The Statement of Facts and Grounds sets out why GLP says that it has standing in the matter, and then raises four grounds of challenge; that HMRC has erred in treating time limits for the raising of a protective assessment as irrelevant; that HMRC has misdirected itself as to its assessment powers; that HMRC has had regard to irrelevant considerations; and that it has failed to apply its charter and guidance. The question of permission, including standing, is not before me. However, there is nothing in the Grounds to suggest that they are frivolous or no more than a “fishing expedition” and Mr Pleming points to the fact that they are drafted by senior tax counsel.
Shortly before the due date for HMRC's Acknowledgement of Service and Summary Grounds to be filed HMRC made the present application. HMRC apply for an order:
“(a) That HMRC disclose to GLP information regarding HMRC's position in relation to Uber London Limited (“ULL”), limited to whether at the date of such disclosure there has been a decision to assess or a decision not to assess ULL for any particular prescribed accounting period (“HMRC's Position”);
(b) That GLP shall not disclose the said information for any purpose;
(c) That a non-party may not obtain a copy of HMRC's Acknowledgment of Service; and
(d) That time limits for HMRC to file an Acknowledgment of Service under CPR part 45.8(2)(a) be extended to 21 days after determination of this application.”
GLP resist (a) on the basis that they say it is unnecessary, and resist the restriction on it contained in (b). It is neutral on the restriction in (c). Uber argue that no disclosure should be made and if any disclosure is made it should be subject to further conditions and controls.
The application turns on the proper interpretation of s.18(2) of the CRCA, and the principle of taxpayer confidentiality. It is therefore necessary to consider the various cases dealing with taxpayer confidentiality in a little detail.
Section 18 (1) and (2) state (as relevant);
(1) Revenue and Customs officials may not disclose information which is held by the Revenue and Customs in connection with a function of the Revenue and Customs.
(2) But subsection (1) does not apply to a disclosure—
(a) which—
(i) is made for the purposes of a function of the Revenue and Customs, and
(ii) does not contravene any restriction imposed by the Commissioners
…,
(c) which is made for the purposes of civil proceedings (whether or not within the United Kingdom) relating to a matter in respect of which the Revenue and Customs have functions,
…
(e) which is made in pursuance of an order of a court
Section 19 (1) and (3) state;
(1) A person commits an offence if he contravenes section 18( 1) or (2A) or 20(9) by disclosing revenue and customs information relating to a person whose identity—
(a) is specified in the disclosure, or
(b) can be deduced from it.
…
(3) It is a defence for a person charged with an offence under this section of disclosing information to prove that he reasonably believed —
(a) that the disclosure was lawful, or
(b) that the information had already and lawfully been made available to the public
Mr Pleming says that it is at least in part because of a concern that there should be no suggestion that HMRC have committed an offence under s.19, that HMRC make this application to court, rather than simply relying on s.18(2)(c).
There is no doubt that there is a strong principle running through the caselaw, and given statutory force in s.18(1), of the importance of protecting confidentiality between the taxpayer and HMRC. In Inland Revenue Commissioners v National Federation of Self Employed and Small Businesses [1982] AC 617 (the Fleet Street Casuals case) the House of Lords was considering a challenge by the NFSE to a special arrangement made by the Revenue with a group of taxpayers. The principal issue in the case was whether NFSE had locus standi to bring a challenge to the Revenue's decision. The majority of the House found that NFSE did not have sufficient locus. Lord Diplock dismissed the claim on the grounds that NFSE had not shown any evidence of ultra vires or unlawful conduct.
All parties before me accept that the law on standing in judicial review has significantly developed since 1982. However, reliance is placed, particularly by Mr Grodzinski, on passages in the judgments concerning taxpayer confidentiality. At p.633B-E Lord Wilberforce said;
“Not only is there no express or implied provision in the legislation upon which such a right could be claimed but to allow it would be subversive of the whole system, which involves that the commissioners' duties are to the Crown, and that matters relating to income tax are between the commissioners and the taxpayer concerned. No other person is given any right to make proposals about the tax payable by any individual: he cannot even inquire as to such tax. The total confidentiality of assessments and of negotiations between individuals and the revenue is a vital element in the working of the system. As a matter of general principle I would hold that one taxpayer has no sufficient interest in asking the court to investigate the tax affairs of another taxpayer or to complain that the latter has been under-assessed or over-assessed: indeed, there is a strong public interest that he should not. And this principle applies equally to groups of taxpayers: an aggregate of individuals each of whom has no interest cannot of itself have an interest.”
Lord Scarman at p.654 E-G said;
Lastly, I wish to comment shortly upon the duty of confidence owed by the revenue to every taxpayer and the right to discovery. The duty of confidence can co-exist with the duty of fairness owed to the general body of taxpayers. It is, however, of great importance when discovery is sought by an applicant, as happened in this case. Upon general principles, discovery should not be ordered unless and until the court is satisfied that the evidence reveals reasonable grounds for believing that there has been a breach of public duty: and it should be limited strictly to documents relevant to the issue which emerges from the affidavits. The revenue in any event will have the right in respect of certain classes of document to plead “public interest immunity,” of which in a proper case the court will be the arbiter: Burmah Oil Co. Ltd. v. Governor and Company of the Bank of England [1980] A.C. 1090.
I treat this passage with a little caution, because firstly it is dealing with discovery of documents, rather than the prior stage in judicial review of whether the fact of a protective assessment (or not) can be disclosed, and secondly, because the principles of the duty of candour have developed very significantly since 1982.
Lord Roskill at p.662F-G said;
The appellants are responsible for the overall management of the relevant part of the taxation system of this country, and for the assessment and collection of taxes from those who are, by law, liable to pay them. Such assessment and collection is a confidential matter between the appellants and each individual taxpayer. Such confidence is allowed to be broken only in those exceptional circumstances for which the statute makes express provision
As I have said it is accepted that the law on standing has much developed since Fleet Street Casuals, and I need only refer to R (World Development Movement) v Secretary of State for Foreign and Commonwealth Office [1995] 1 WLR 386.
The principle of taxpayer confidentiality was considered by the Supreme Court in R (Ingenious Media) v HMRC [2016] 1 WLR 4164. In that case the Claimant brought a judicial review against HMRC for a declaration that the ‘off the record’ briefing to the media by a senior HMRC official about the Claimant's tax affairs was unlawful and in breach of s.18 CRCA. The case turned on the meaning of s.18(2)(a)(i) and did not concern s.18(2)(c), or the circumstances in which an order under (e) should be made. The Supreme Court allowed the appeal by Ingenious Media and at [17–19] Lord Toulson said;
17. Unfortunately the courts below were not referred (or were only scarcely referred) to the common law of confidentiality. The duty of confidentiality owed by HMRC to individual taxpayers is not...
To continue reading
Request your trial