R (Parissis and Others) v Grinyer (Inspector of Taxes) and another
| Jurisdiction | England & Wales |
| Judgment Date | 18 December 2009 |
| Neutral Citation | [2009] EWHC 3734 (Admin) |
| Docket Number | CO/11572/08 |
| Court | Queen's Bench Division (Administrative Court) |
| Date | 18 December 2009 |
[2009] EWHC 3734 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
THE ADMINISTRATIVE COURT
Before: CMG Ockelton
(Sitting as a Deputy High Court Judge)
CO/11572/08
Mr K Gordon and Miss X Montes Manzano (instructed by Sharpe Prtichard) appeared on behalf of the Claimant s
Miss P Whipple (instructed by the Solicitor for Her Majesty's Revenue and Customs) appeared on behalf of the First Defendant
The Second defendant did not appear and was not represented
(As approved)
THE DEPUTY JUDGE: This application for judicial review raises a short point on the construction of section 20 of the Taxes Management Act 1970. Permission was granted by Bean J on limited grounds on 12 May 2009.
Section 20 empowered Her Majesty's Revenue and Customs (“HMRC”) to require a taxpayer, or other person, to deliver documents or furnish information for the purposes of assessing liability to tax. Section 20 had a considerable legislative history. In its emanation in the 1970 Act it was amended a number of times. It was repealed in full by section 113 of the Finance Act 2008. That repeal, and new statutory provisions in replacement of section 20, came into force on 1 April 2009.
So far as relevant to this application, the provisions of section 20 are, or were, as follows:
“Power to call for documents of taxpayers and others
20(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.”
Subsection (3) enables an Inspector to give a notice to a person other than the taxpayer who he believes has information relating to the taxpayer's affairs:
“(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.”
The claimants are taxpayers to whom notices under section 20(1) were issued. The first defendant, represented by Miss Whipple, is the Inspector, Mr Grinyer, whose notices they are. He is an Inspector authorised under subsection (7). The second defendant is the General Commissioners of the Oxford City Division, who have taken no part in these proceedings, other than indicating that they oppose the claimants’ claim.
The Facts
The claimants were directors of two companies. In January 2007 HMRC gave notice of an investigation into the companies’ corporation tax returns for the accounting period ending on 31 December 2005. In the course of that investigation, requests were made for various documents from the claimants. On 9 January 2008, HMRC wrote to the claimants’ agent informing him that the scope of enquiries had been extended, and inviting a response to specific questions concerning the individual tax liability of the three claimants. In March 2008 there was a meeting between Mr Paul Gaskell and Mr Rob Keating of HMRC, and the claimants’ agent, at which the question of obtaining personal financial information from the claimants was discussed. On 25 July 2008 Mr Gaskell wrote to each of the claimants making informal requests for documentation, information and sight of private financial records, as a precursor to issuing any formal notice.
The documentation and the information sought by HMRC was not forthcoming, and an application was therefore made to the General Commissioners for the Division of Oxford City (the second defendant) on 5 September 2008 for consent to six notices being issued pursuant to section 20(1). It appears that both Mr Grinyer and Mr Gaskell were present at the hearing before the General Commissioners.
The consent of the Commissioners was granted and the notices were issued on the same date. The notices were sent to the respective addressees under cover of letters dated 8 September 2008. The notices are all in the same form, and I take it that it is a standard form of words. No particular issue has been the subject of any substantive submission before me in relation to it, other than a point as to the person to whom the addressee of the notice should deliver the documents in question. That point was made in criticism of the notices but it is not said that it invalidated them. I do not need to give it any further attention.
The letters are also all in the same form. There are six of them, one accompanying each notice. There are two notices to each of the taxpayers. I will read out one of the letters, addressed to Mr Harrison, who is the second claimant:
“Dear Mr Harrison,
Requests for documents and particulars
Section 20(1) Taxes Management Act 1970
We refer to our letter of 25 July 2008 when we requested information and documentation in connection with our enquiries into your personal tax situation. We are now enclosing formal documents under the provisions of section 20(1) Taxes Management Act 1970, duly signed by a General Commissioner along with a summary of the statutory provisions. In order to comply with the notices you should forward the documents and particulars referred to us on them to reach us no later than 13 October 2008.
In accordance with section 20(8E) Taxes Management Act 1970 we can confirm that the documents and particulars required have been requested by us as part of our enquiries into your tax affairs as they will help us to establish whether your income is fully assessed to income tax. Our reasons for requiring them have been set out in previous correspondence such as our letter of 9 February 2008 to your agent Andrew Brown of Andrew Brown 57 Limited. We also discussed our concerns at length with Mr Brown when we met with him at his office on 4 March 2008. In summary the documents and particulars will assist in quantifying your income, establishing whether you have sufficient funds to finance your lifestyle and acquisitions of capital assets checking whether these funds can be identified as originating from known sources. Please do not hesitate to telephone me on the site if you have any enquiries.
A copy of this letter and a copy of the notices have been forwarded to your agent Andrew Brown of Andrew Brown 57 limited.
Yours sincerely,
Paul Gakell
HM Inspector of taxes.”
Each of the letters and the notices was accompanied also by a transcript of section 20. The notices are each signed by the first defendant, who, as I have said, is an Inspector authorised under section 20(7). They are also signed by the General Commissioner who authorised them. The letters, albeit expressed in the second person plural, are signed only by Mr Gaskell. He is not the person who issued the notices and, as he is not an Inspector authorised by subsection (7), he could not have issued them.
The claimants’ case
There is no doubt that a certain amount of energy has been expended on both sides on issues relating to the signature on the letters. At one stage it did indeed appear that the principal question being raised by the claimants was whether there was compliance with subsection (8E) if the letter was signed by a person not able to give the subsection (1) notice. In the course of oral argument it became clear that the question of who signs the letter was not really important to the claimants. Their claim is as follows: first, the taxpayer is entitled to require compliance with section 20(8E); secondly, compliance means being informed of the authorised Inspector's reasons for seeking the notice; thirdly, the letters are signed by a person who is not the authorised Inspector, use “we” in a purely general or conventional sense, and do not specifically say that the reasons given are the reasons of the Inspector, rather than the reasons of the writer of the letter; fourthly, the taxpayer is entitled not to be in any doubt that the letters do indeed comply with section 20(8E) by giving the authorised Inspector's reasons; fifthly, therefore, if there is any ambiguity, section 20(8E) has not been complied with; sixthly, if section 20(8E) has not been complied with the section 20(1) notice is invalid, or at best imperfect, so as to be for the present ineffective.
The validity of the letters as compliance with subsection (8E)
I have been referred to a number of authorities bearing on how the duty to give reasons under various statutes is to be carried out. Under section 166(2) of the Housing Act 1957 a Notice of Proceedings from a local authority under that Act “shall be signed by their clerk or his lawful deputy”. In Graddage v...
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