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Ingenious Media Holdings plc & Anor, R (on the application of) v Revenue and Customs [2016]

November 2, 2016

In Ingenious Media Holdings plc & Anor, R (on the application of) v Revenue and Customs [2016] UKSC 54 (19 October 2016) the matter came before the Supreme Court and was heard before Lady Hale and Lords Mance, Kerr, Reed and Toulson.  The Judgment was delivered by Lord Toulson, with whom all the Justices agreed. This Appeal concerned the duty of confidentiality that HMRC owed tax payers in relation to their tax matters, which is now in statutory form. The background to the matter concerned the Appellants who ran a business which involved the promotion of film investment schemes as partnerships.

In 2012, two reporters from The Times contacted the press office at HMRC. They had a meeting on 14th June 2012, with the Permanent Secretary for Tax, which was agreed to be off the record. The HMRC official had reiterated this to the journalists and it was acknowledged, in accordance with the transcript. During the meeting it became obvious that the journalists were aware of the Appellants and the film schemes, both Appellants being discussed after the journalists made reference to them.

A subsequent article was written and published in The Times on 21st June 2012 which mentioned the Appellants, who had always been open and cooperative with HMRC over a period of years, concerning the financial set up of their film investment partnerships. The Appellants, whilst the meeting was occurring between the journalists and the HMRC Official, were still waiting to hear further from HMRC.

The Company and its CEO brought a claim for judicial review of HMRC as to their disclosure of information to the journalists.

In the High Court, Mr Justice Sales observed that upon reading the transcript, the HMRC official had only referred to the CEO Appellant in the process of being open to the journalists and not to target him. He considered that making reference to tax avoidance whilst discussing film investment schemes was appropriate and, in accordance with what was being discussed with the journalists. It was apparent the journalists knew of the Appellants and their promotion of film investment schemes.

He dismissed the allegation that the HMRC Official had targeted the Claimants. He considered that reference to the Claimants was within the course of the questions that had been asked by the journalists on the subject of tax avoidance and film investment schemes, the HMRC Official had behaved properly and reasonably in making the disclosures he did regarding the Claimants.

The Claimants appealed and were given permission to appeal to the Court of Appeal who upheld the High Court’s decision. The complaints in the Court of Appeal had been:

  • That HMRC acted unlawfully – it breached s.18 of the Commissioners for Revenue and Customs Act 2005 (“the 2005 Act”) and, though this adds no more, committed an offence contrary to s.19.
  • That HMRC wrongly interfered with the appellants’ rights under Article 8 of the European Convention on Human Rights (“ECHR”).
  •  That HMRC breached Article 1 Protocol 1 (“A1P1”) to the ECHR.

Sir Robin Jacob who delivered the Judgment, with which Lord Justices Moore-Bick and Tomlinson agreed, found that

“It was entirely in the public interest that HMRC should let the public know its views about these schemes. Most particularly any potential investor in them would very much want to know that HMRC considered that the schemes or some of them did not work”.

In the Supreme Court, Lord Toulson took the line that it was a matter for the Court to find whether there had been a breach of confidentiality and disagreed with the lower courts. He considered it was

“not for them to approach the disclosures made by Mr Hartnett as if they were primary decision makers. In accordance with ordinary principles, the question of breach of confidentiality is one for the court’s judgment”. 

He considered that the information supplied by the HMRC official to the journalists was confidential information under which HMRC owed a duty of confidentiality within s.18(1) of the Commissioners for Revenue and Customs Act 2005.

He noted that at the time of the meeting with the journalists, the tax implications concerning film schemes was under consideration.  He did not consider it a justification by HMRC that it was to promote good relations with the media or to put forward HMRC’s  views on tax avoidance schemes.

Lord Toulson observed that the notion of HMRC officials giving out confidential information concerning individuals to the media “on a non-attributable basis is, or should be, a matter of serious concern”.  He noted that HMRC may sometimes think it necessary to take the press into their confidence but those incidences would be rare.

He concluded:

“I would reject the argument that the disclosure was justified under section 18(2)(a), allow the appeal and invite the parties’ written submissions as to the appropriate form of order”.