R (Cooke) v HM Revenue and Customs

JurisdictionEngland & Wales
CourtQueen's Bench Division (Administrative Court)
JudgeMr Justice Munby
Judgment Date30 January 2007
Neutral Citation[2007] EWHC 81 (Admin)
Date30 January 2007
Docket NumberCase No: CO/10433/2005

[2007] EWHC 81 (Admin)

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

ADMINISTRATIVE COURT

Before:

Mr Justice Munby

Case No: CO/10433/2005

Between
R (jonathan Cedric Cooke)
Claimant
and
The Commissioners for Her Majesty's Revenue and Customs
Defendant

Mr Robin Mathew QC (instructed by Cooke Matheson) for the claimant

Ms Ingrid Simler QC (instructed by the Acting Solicitor of HMRC) for the defendant

Hearing dates: 15–16 January 2007

Mr Justice Munby
1

This application for judicial review raises a short but important point relating to the powers of The Commissioners for Her Majesty's Revenue and Customs in relation to income tax.

2

The question is whether the Commissioners' exercise of their powers under sections 20(3) and 20B(3) of the Taxes Management Act 1970 when requiring the production of documents or information from a barrister, advocate or (as in the present case) a solicitor is subject to the same conditions and safeguards as when an inspector is exercising his powers under section 20(3) in relation to anyone other than a barrister, advocate or solicitor.

3

Mr Robin Mathew QC who appears on behalf of the claimant solicitor submits that the Commissioner's powers are so circumscribed. Ms Ingrid Simler QC on behalf of the Commissioners disputes this. In my judgment the Commissioners are correct.

The statutory framework

4

The provisions with which I am directly concerned form part of a comprehensive scheme which is set out in sections 20 to 20D of the Taxes Management Act 1970 (as amended). For present purposes the most directly relevant provisions are to be found in sections 20 and 20B.

5

So far as material for present purposes section 20 (which is headed "Power to call for documents of taxpayer and others") provides as follows:

"(1) Subject to this section, an inspector may by notice in writing require a person –

(a) to deliver to him such documents as are in the person's possession or power and as (in the inspector's reasonable opinion) contain, or may contain, information relevant to –

(i) any tax liability to which the person is or may be subject, or

(ii) the amount of any such liability, or

(b) to furnish to him such particulars as the inspector may reasonably require as being relevant to, or to the amount of, any such liability.

(3) Subject to this section, an inspector may, for the purpose of enquiring into the tax liability of any person ("the taxpayer"), by notice in writing require any other person to deliver to the inspector or, if the person to whom the notice is given so elects, to make available for inspection by a named officer of the Board, such documents as are in his possession or power and as (in the inspector's reasonable opinion) contain, or may contain, information relevant to any tax liability to which the taxpayer is or may be, or may have been, subject, or to the amount of any such liability …

(7) Notices under subsection ( 1) or (3) above are not to be given by an inspector unless he is authorised by the Board for its purposes; and –

(a) a notice is not to be given by him except with the consent of a General or Special Commissioner; and

(b) the Commissioner is to give his consent only on being satisfied that in all the circumstances the inspector is justified in proceeding under this section.

(8E) An inspector who gives a notice under subsection ( 1) or (3) above shall also give to –

(a) the person to whom the notice applies (in the case of a notice under subsection (1) above), or

(b) the taxpayer concerned (in the case of a notice under subsection (3) above),

a written summary of his reasons for applying for consent to the giving of the notice.

(9) To the extent specified in section 20B below, the above provisions are subject to the restrictions of that section."

6

Section 20B (which is headed "Restrictions on powers under ss 20 and 20A") provides in material part as follows:

"(1) Before a notice is given to a person by an inspector under section 20(1), (3) …,the person must have been given a reasonable opportunity to deliver (or, in the case of section 20(3), to deliver or make available) the documents in question, or to furnish the particulars in question; and the inspector must not apply for consent under section 20(7) …,until the person has been given that opportunity.

(1A) Subject to subsection (1B) below, where a notice is given to any person under section 20(3) the inspector shall give a copy of the notice to the taxpayer to whom it relates.

(1B) If, on an application by the inspector, a General or Special Commissioner so directs, a copy of a notice under section 20(3) need not be given to the taxpayer to whom it relates; but such a direction shall not be given unless the Commissioner is satisfied that the inspector has reasonable grounds for suspecting the taxpayer of fraud.

(3) An inspector cannot under section 20( 1) or (3) … give notice to a barrister, advocate or solicitor, but the notice must in any such case be given (if at all) by the Board; and accordingly in relation to a barrister, advocate or solicitor for references in section 20(3) and (4) … to the inspector there are substituted references to the Board.

(5) A notice under section 20(3), does not oblige a person to deliver or make available any document the whole of which originates more than 6 years before the date of the notice.

(6) But subsection (5) does not apply where the notice is so expressed as to exclude the restrictions of that subsection; and it can only be so expressed where –

(a) the notice being given by an inspector with consent under section 20(7), the Commissioner giving consent has also given approval to the exclusion;

(b) the notice being given by the Board, they have applied to a General or Special Commissioner for, and obtained, that approval.

For this purpose the Commissioner gives approval only if satisfied, on the inspector's or the Board's application, that there is reasonable ground for believing that tax has, or may have been, lost to the Crown owing to the fraud of the taxpayer.

(8) A notice under section 20(3) … does not oblige a barrister, advocate or a solicitor to deliver or make available, without his client's consent, any document with respect to which a claim to professional privilege could be maintained."

(I note that the reference in section 20B(3) to section 20(4) is redundant, the latter provision having now been repealed.)

7

I should also refer to certain provisions in section 20C:

"(1) If the appropriate judicial authority is satisfied on information on oath given by an officer of the Board that –

(a) there is reasonable ground for suspecting that an offence involving serious fraud in connection with, or in relation to, tax is being, has been or is about to be committed and that evidence of it is to be found on premises specified in the information; and

(b) in applying under this section, the officer acts with the approval of the Board given in relation to the particular case,

the authority may issue a warrant in writing authorising an officer of the Board to enter the premises, if necessary by force, at any time within 14 days from the time of issue of the warrant, and search them.

(2) Section 4A of the Inland Revenue Regulation Act 1890 (Board's functions to be exercisable by an officer acting under their authority) does not apply to the giving of Board approval under this section.

(3) An officer who enters the premises under the authority of a warrant under this section may –

(a) take with him such other persons as appear to him to be necessary;

(b) seize and remove any things whatsoever found there which he has reasonable cause to believe may be required as evidence for the purposes of proceedings in respect of such an offence as is mentioned in subsection (1) above; and

(c) search or cause to be searched any person found on the premises whom he has reasonable cause to believe to be in possession of any such things;

but no person shall be searched except by a person of the same sex.

(4) Nothing in subsection (3) above authorises the seizure and removal of items subject to legal privilege."

8

Section 20D defines "the appropriate judicial authority" as being, in England and Wales, a Circuit Judge or a District Judge (Magistrates' Courts).

9

In accordance with the Commissioners for Revenue and Customs Act 2005, the Commissioners for Her Majesty's Revenue and Customs exercise all the functions previously vested in the Commissioners of Inland Revenue. Section 50 of that Act provides that references in previous enactments to the Commissioners of Inland Revenue (however expressed) are to be taken as references to the Commissioners for Her Majesty's Revenue and Customs. The effect of this is that statutory references to the Board (that is, the Board of Inland Revenue) are now to be taken as references to the Commissioners for Her Majesty's Revenue and Customs. Section 2(1) of the same Act provides that staff appointed by the Commissioners are to be known as "officers of Revenue and Customs." Inspectors are therefore now, for statutory purposes, "officers."

10

Section 12 of the 2005 Act makes provision for the conduct of the Commissioners' proceedings. Section 12(2)(b)(i) provides that arrangements, made in accordance with sections 12(1) and 12(3) with the agreement of more than half of the Commissioners holding office at the time, may provide that a function of the Commissioners may be exercised by two Commissioners.

11

Prior to the coming into force of the 2005 Act the Commissioners of Inland Revenue had a general statutory power under section 4A of the Inland Revenue Regulation Act...

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1 cases
  • PML Accounting Ltd
    • United Kingdom
    • First Tier Tribunal (Tax Chamber)
    • 10 September 2015
    ...in writing for him to consider. Consent was given to the issuance of the notice.[156] R (on the application of Cooke) v R & C Commrs TAX[2007] BTC 634 concerned a solicitor who received a notice under s20(3) TMA that required information to be provided in relation to a taxpayer's affairs. T......

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