Mark Mitchell v The Commissioners for HM Revenue and Customs

JurisdictionEngland & Wales
JudgeLady Justice Whipple,Lady Justice Carr,Lord Justice Arnold
Judgment Date10 March 2023
Neutral Citation[2023] EWCA Civ 261
Docket NumberCase No: CA-2021-003418
CourtCourt of Appeal (Civil Division)
(1) Mark Mitchell
(2) Paul Bell
The Commissioners for his Majesty's Revenue and Customs

[2023] EWCA Civ 261


Lord Justice Arnold

Lady Justice Carr


Lady Justice Whipple

Case No: CA-2021-003418






[2021] UKUT 0250 (TCC)

Royal Courts of Justice

Strand, London, WC2A 2LL

Barrie Akin (instructed by Hill Dickinson LLP) for the Appellant (Mr Bell)

Julian Hickey and Rebecca Sheldon (instructed by Levy & Levy Solicitors) for the Respondent (Mr Mitchell)

James Puzey, Jenny Goldring and Aparna Rao (instructed by Solicitor to HM Revenue and Customs) for the Respondents (HMRC)

Hearing date: 25 January 2023

Approved Judgment

Lady Justice Whipple



By this appeal, Mr Bell challenges the UT's determination that he is not entitled to see certain documents which are in the possession of HMRC and which HMRC wish to disclose to him. The documents arise out of HMRC's investigation into the tax affairs of another taxpayer, Mr Mitchell. Mr Mitchell's objection to the disclosure of at least some of those documents was successful in the FTT and UT. The issue for this Court is whether Mr Mitchell's objections lie on solid ground and should be upheld. This appeal is brought with the leave of this Court.



To resolve the issue, it is necessary to have regard to the Commissioners' statutory powers under the Commissioners for Revenue and Customs Act 2005 (“CRCA”), and to the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009, SI 2009/273 (the “FTT Rules”). Relevant parts of the legislation and the FTT Rules are set out in the Appendix to this judgment. What follows is an overview of the key provisions which relate to this appeal.


Section 5(1) of the CRCA sets out HMRC's functions, which include the collection and management of tax. Section 51(2)(a) defines a function as any power or duty (including a power or duty that is ancillary to another power or duty). Section 17 confers powers on HMRC to use information acquired in connection with a function in connection with any other function. Section 18 is headed “Confidentiality”. By section 18(1), HMRC are prohibited from disclosing information which is held in connection with their functions. But that prohibition does not extend to categories of disclosure listed in section 18(2), which include (a) disclosure made for the purposes of a function of HMRC which does not contravene any restriction imposed by HMRC; and (c) disclosure for the purposes of civil proceedings relating to a matter in respect of which HMRC have functions. Disclosure in pursuance of a court order is also permitted, see section 18(2)(e).


Section 18 was considered by the Supreme Court in R (Ingenious Media Holdings plc) v Revenue and Customs Commissioners [2016] UKSC 54, [2016] 1 WLR 4164. The Court acknowledged the general and long-established principle of confidentiality owed to taxpayers (at [22]). Lord Toulson, with whom the other members of the Court agreed, said this at [23]:

“… I take section 18(1) to be intended to reflect the ordinary principle of taxpayer confidentiality referred to in para 17, to which section 18(2)(a)(i) creates an exception by permitting disclosure to the extent reasonably necessary for HMRC to fulfil its primary function.”


The FTT has powers to manage proceedings before it. Those powers are subject to the overriding objective of dealing with cases fairly and justly (Rule 2). Disclosure for standard or complex cases in the FTT is governed by Rule 27, and in particular Rule 27(2)(b) which requires each party to serve a list of documents which that party intends to “rely on or produce” in the proceedings. A party can apply for specific disclosure under Rule 5(3)(d) which empowers the FTT “permit or require a party or another person to provide documents, information or submissions to the Tribunal or a party”. Rule 15(2)(a) empowers the FTT to admit evidence and Rule 15(2)(b) empowers the FTT to exclude evidence which would otherwise be admissible, including where admission of that evidence would be unfair (see Rule 15(2)(b)(iii)). By Rule 25, a respondent to an appeal in the FTT (which will typically be HMRC) is required to send or deliver a statement of case which sets out the respondent's position in relation to the case (Rule 25(2)(b)).


This Court has held that the FTT Rules are made for “important as well as simple cases” and has emphasised the narrow approach to disclosure under the FTT Rules, contrasting Rule 27(2), which extends only to documents which a party intends to “rely on or produce”, with standard disclosure in civil proceedings which extends not only to documents upon which a party relies but in addition to documents which adversely affects a party's own case, adversely affect another party's case, and/or support another party's case (see CPR 31.6 and the commentary in the White Book, E Buyer UK Ltd v Revenue and Customs Commissioners [2017] EWCA Civ 1416, [2018] 1 WLR 1524 per Vos LJ at [94], and HMRC v Smart Price Midlands Ltd [2019] EWCA Civ 841, [2019] 1 WLR 5070 per Rose LJ at [15]). That narrow approach is just a starting point and the interests of fairness and justice, encapsulated in the overriding objective, may require disclosure in the FTT to be drawn more broadly in any particular case: see Smart Price Midlands per Rose LJ at [40], [53] and [56], a case concerning a taxpayer's appeal to the FTT against a finding by HMRC that he was not a “fit and proper person” to sell controlled liquor wholesale in which the Court of Appeal confirmed that disclosure corresponding to standard disclosure under the CPR was appropriate.


The PLNs


In or around 2013, HMRC commenced an investigation into the personal and business tax affairs of Mr Mitchell under Code of Practice 9 (“COP 9”). As part of that investigation, HMRC conducted interviews with Mr Mitchell. One area of questioning extended to the tax affairs of two companies, Universal Payroll Services Ltd (“Payroll”) and Universal Project Services Ltd (“Project”), of which Mr Mitchell had been a director.


On 8 December 2017, HMRC issued separate personal liability notices, or “PLNs” against each of Mr Mitchell and Mr Bell. The PLNs were issued under para 19 of Schedule 24 to the Finance Act 2007 and by them HMRC sought to recover from Mr Mitchell and Mr Bell penalties which HMRC asserted were due from Payroll and Project for VAT periods between 2010 and 2014. Payroll and Project had by that time both gone into liquidation and HMRC pursued Mr Mitchell and Mr Bell on the basis that at the material time they were both “shadow directors” of those companies to whom deliberate inaccuracies in the VAT returns of Payroll and Project could be attributed. The amount of penalties said to be owed was around £12m and HMRC sought half of that sum from each of Mr Mitchell and Mr Bell.


Mr Mitchell and Mr Bell requested HMRC to undertake an internal review. That review concluded on 12 February 2018 and upheld both PLNs, in part relying on evidence obtained from the COP 9 investigations conducted by HMRC.

The Appeals


Mr Mitchell and Mr Bell appealed to the First-tier Tribunal (“FTT”) against the PLNs. Mr Bell's Notice of Appeal was dated 19 February 2018. In it, he denied liability for the tax. He said he had resigned as a director of Payroll and Projects and although he remained a shareholder, he took no active role in running Payroll or Project, that the VAT assessments in question fell outside the period when he was a director and that he was unaware of how the VAT returns were prepared. He said he had not seen the evidence on which HMRC relied in the PLN, which evidence was extracted by way of the COP 9 interviews, and he reserved the right to amend his Notice of Appeal once that evidence became available. Mr Mitchell's Notice of Appeal to the FTT was dated 1 March 2018; it contained a denial of liability and a denial that he was a shadow director of Payroll or Project at the material time.


On 9 May 2018 the FTT directed the appeals of both Mr Mitchell and Mr Bell to be heard together and directed HMRC to serve a single Statement of Case addressing both appeals. The appeals were categorised as complex. On 9 July 2018, HMRC served their Statement of Case, summarising the facts and issues and setting out their contentions. In relation to Mr Mitchell, HMRC asserted that he was a shadow director of Payroll and Project at the material time, relying on evidence obtained in the course of the COP 9 investigation. In relation to Mr Bell, HMRC asserted that he too was a shadow director of Payroll and Project at the material time, relying in part on an extract from Mr Mitchell's COP 9 interview where Mr Mitchell had said that Mr Bell made all the decisions in both companies. The Statement of Case referred to a number of documents and classes of documents which had come into HMRC's possession as part of the COP 9 investigation, including meeting notes between HMRC and Mr Mitchell and outline disclosure volunteered to HMRC by Mr Mitchell as part of the COP 9 process. Mr Bell's representatives asked HMRC to disclose all of those documents.


HMRC asked Mr Mitchell to consent to the disclosure of those documents to ensure transparency between the parties to the combined appeals, but Mr Mitchell's representatives responded by letter dated 22 October 2018 saying that material should only be disclosed “to the extent that it is relevant to the appeals” and suggested that any “non-relevant personal information should be redacted”.


On 31 October 2018, HMRC served their List of Documents. This was a single list to address both appeals. Included on...

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