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HMRC's power to use information 

 

"(1)     Information acquired by the Revenue and Customs in connection with a function may be used by them in connection with any other function.

 

(2)     Subsection (1) is subject to any provision which restricts or prohibits the use of information and which is contained in—

(a)     this Act,

(b)     any other enactment, or

(c)     an international or other agreement to which the United Kingdom or Her Majesty's Government is party."

 

(6)     Part 2 of Schedule 2 (which makes provision about the supply and other use of information in specified circumstances) shall have effect." (CRCA 2005, s.17(1), (2), (6))

Meaning of Revenue and Customs

"(3)     In subsection (1) “the Revenue and Customs” means—

(a)     the Commissioners,

(b)     an officer of Revenue and Customs,

(c)     a person acting on behalf of the Commissioners or an officer of Revenue and Customs,

(d)     a committee established by the Commissioners,

(e)     a member of a committee established by the Commissioners,

(f)     the Commissioners of Inland Revenue (or any committee or staff of theirs or anyone acting on their behalf),

(g)     the Commissioners of Customs and Excise (or any committee or staff of theirs or anyone acting on their behalf), and

(h)     a person specified in section 6(2) or 7(3)." (CRCA 2005, s.17(3))

 

Meaning of function

"(4)     In subsection (1) “function” means a function of any of the persons listed in subsection (3)." (CRCA 2005, s.17(4))

 

Limit on meaning of enactment

"(5)     In subsection (2) the reference to an enactment does not include—

(a)     an Act of the Scottish Parliament or an instrument made under such an Act,

(aa)     an Act of the National Assembly for Wales or an instrument made under such an Act,

(b)     an Act of the Northern Ireland Assembly or an instrument made under such an Act." (CRCA 2005, s.17(5))

HMRC's power to use information 
Common law duty

Common law duty of confidentiality

 

“[17] It is a well established principle of the law of confidentiality that where information of a personal or confidential nature is obtained or received in the exercise of a legal power or in furtherance of a public duty, the recipient will in general owe a duty to the person from whom it was received or to whom it relates not to use it for other purposes. The principle is sometimes referred to as the Marcel principle, after Marcel v Commissioner of Police of the Metropolis [1992] Ch 225. In relation to taxpayers, HMRC’s entitlement to receive and hold confidential information about a person or a company’s financial affairs is for the purpose of enabling it to assess and collect (or pay) what is properly due from (or to) the tax payer. In R v Inland Revenue Comrs, Ex p National Federation of Self-Employed and Small Businesses Ltd [1982] AC 617, 633, Lord Wilberforce said that “the whole system … involves that … matters relating to income tax are between the commissioners and the taxpayer concerned”, and that the “total confidentiality of assessments and of negotiations between individuals and the revenue is a vital element in the working of the system”.” (R (oao Ingenious Media Holdings plc) v. HMRC [2016] UKSC 54)

Human Rights Act right to privacy 

 

Persons who have simply come under suspicion have a reasonable expectation of privacy

"[53] As has been made clear in a number of cases, 'private life' in article 8 is a broad term and not susceptible to exhaustive definition, see Pretty v. United Kingdom (2002) 35 EHRR 1 at [61], and PG v. United Kingdom (2008) 46 EHRR 51 at [56]. However, it is plainly a broad concept which covers the physical and psychological integrity of a person and may embrace an individual's physical and social identity...

...

[82] I would take the opportunity to make clear that those who have simply come under suspicion by an organ of the state have, in general, a reasonable and objectively founded expectation of privacy in relation to that fact and an expressed basis for that suspicion. The suspicion may ultimately be shown to be well-founded or ill-founded, but until that point the law should recognise the human characteristic to assume the worst (that there is no smoke without fire); and to overlook the fundamental legal principle that those who are accused of an offence are deemed to be innocent until they are proven guilty." (ZXC v. Bloomberg LP [2020] EWCA Civ 611, Simon LJ)

Human Rights Act right to privacy 

Statutory duty of confidentiality

 

"(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." (CRCA 2005, s.18(1))

"(3)     Subsection (1) is subject to any other enactment permitting disclosure." (CRCA 2005, s.18(3))

Definitions

"(4)     In this section—

(a)     a reference to Revenue and Customs officials is a reference to any person who is or was—

(i)     a Commissioner,

(ii)     an officer of Revenue and Customs,

(iii)     a person acting on behalf of the Commissioners or an officer of Revenue and Customs, or

(iv)     a member of a committee established by the Commissioners,

 

(b)     a reference to the Revenue and Customs has the same meaning as in section 17,

 

(c)     a reference to a function of the Revenue and Customs is a reference to a function of—

(i)     the Commissioners, or

(ii)     an officer of Revenue and Customs,

 

(d)     a reference to the Scottish inspectors or the Northern Ireland inspectors has the same meaning as in section 27, and

 

(e)     a reference to an enactment does not include—

(i)     an Act of the Scottish Parliament or an instrument made under such an Act,

(ia)     an Act of the National Assembly for Wales or an instrument made under such an Act, or

(ii)     an Act of the Northern Ireland Assembly or an instrument made under such an Act." (CRCA 2005, s.18(4))

Statutory duty

Officer's statutory declaration 

 

"(1)     Each person who is appointed under this Act as a Commissioner or officer of Revenue and Customs shall make a declaration acknowledging his obligation of confidentiality under section 18.

(2)     A declaration under subsection (1) shall be made—

(a)     as soon as is reasonably practicable following the person's appointment, and

(b)     in such form, and before such a person, as the Commissioners may direct.

(3)     For the purposes of this section, the renewal of a fixed term appointment shall not be treated as an appointment." (CRCA 2005, s.3)

Officer's statutory declaration 

Exceptions subject to data protection legislation

 

"(1)     Nothing in sections 17 to 21 authorises the making of a disclosure which—

(a)     contravenes the data protection legislation, or

(b)     is prohibited by any of Parts 1 to 7 or Chapter 1 of Part 9 of the Investigatory Powers Act 2016.

(2)     In this section, “the data protection legislation” has the same meaning as in the Data Protection Act 2018 (see section 3 of that Act)." (CRCA 2005, s.22)

Exceptions subject to data protection legislation

Disclosure for the purposes of a function of HMRC

 

"(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" (CRCA 2005, s.18(2)(a))

Only to the extent reasonably necessary to fulfil primary function of HMRC

 

“[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.” (R (oao Ingenious Media Holdings plc) v. HMRC [2016] UKSC 54)

 

Does not extend to briefing the press

 

“[22]... In passing the 2005 Act, Parliament cannot be supposed to have envisaged that by section 18(2)(a)(i) it was authorising HMRC officials to discuss its views of individual taxpayers in off the record discussions, whenever officials thought that this would be expedient for some collateral purpose connected with its functions, such as developing HMRC’s relations with the press. If Parliament really intended to delegate to officials such a wide discretion, limited only by a rationality test, in place of the ordinary principles of confidentiality applicable to public bodies in respect of confidential or private information obtained under statutory powers or for a statutory purpose, it would have significantly emasculated the primary duty of confidentiality recognised in section 18(1).” (R (oao Ingenious Media Holdings plc) v. HMRC [2016] UKSC 54)

 

Although never say never

 

“[35] ... The whole idea of HMRC officials supplying confidential information about individuals to the media on a non-attributable basis is, or should be, a matter of serious concern. I would not seek to lay down a rule that it can never be justified, because “never say never” is a generally sound maxim. It is possible, for example, to imagine a case where HMRC officials might be engaged in an anti-smuggling operation which might be in danger of being wrecked by journalistic investigations and where for operational reasons HMRC might judge it necessary to take the press into its confidence, but such cases should be exceptional.” (R (oao Ingenious Media Holdings plc) v. HMRC [2016] UKSC 54)

Public interest disclosure

 

"(2)     But subsection (1) does not apply to a disclosure—

[...]

(b)     which is made in accordance with section 20 or 21,

[...]" (CRCA 2005, s.18(2)(b))

"(1)     Disclosure is in accordance with this section (as mentioned in section 18(2)(b)) if—

(a)     it is made on the instructions of the Commissioners (which may be general or specific),

(b)     it is of a kind—

(i)     to which any of subsections (2) to (7) applies, or

(ii)     specified in regulations made by the Treasury, and

(c)     the Commissioners are satisfied that it is in the public interest." (CRCA 2005, s.20(1))

 

Disclosure to persons exercising public functions to prevent or detect crime in order to comply with obligation

"(2)     This subsection applies to a disclosure made—

(a)     to a person exercising public functions (whether or not within the United Kingdom),

(b)     for the purposes of the prevention or detection of crime, and

(c)     in order to comply with an obligation of the United Kingdom, or Her Majesty's Government, under an international or other agreement relating to the movement of persons, goods or services." (CRCA 2005, s.20(2))

 

Professional misconduct

"(3)     This subsection applies to a disclosure if—

(a)     it is made to a body which has responsibility for the regulation of a profession,

(b)     it relates to misconduct on the part of a member of the profession, and

(c)     the misconduct relates to a function of the Revenue and Customs." (CRCA 2005, s.20(3))

 

Disclosure to constable 

"(4)     This subsection applies to a disclosure if—

(a)     it is made to a constable, and

(b)     either—

(i)     the constable is exercising functions which relate to the movement of persons or goods into or out of the United Kingdom, or

(ii)     the disclosure is made for the purposes of the prevention or detection of crime." (CRCA 2005, s.20(4))

 

Disclosure to the National Criminal Intelligence Service

 

"(5)     This subsection applies to a disclosure if it is made—

(a)     to the National Criminal Intelligence Service, and

(b)     for a purpose connected with its functions under section 2(2) of the Police Act 1997 (c 50) (criminal intelligence)." (CRCA 2005, s.20(5))

 

Public health and safety

 

"(6)     This subsection applies to a disclosure if it is made—

(a)     to a person exercising public functions in relation to public safety or public health, and

(b)     for the purposes of those functions." (CRCA 2005, s.20(6))

 

Computerised database

 

(7)     This subsection applies to a disclosure if it—

(a)     is made to the Secretary of State for the purpose of enabling information to be entered in a computerised database, and

(b)     relates to—

(i)     a person suspected of an offence,

(ii)     a person arrested for an offence,

(iii)     the results of an investigation, or

(iv)     anything seized." (CRCA 2005, s.20(7))

 

No further disclosure without HMRC consent

"(9)     Information disclosed in reliance on this section may not be further disclosed without the consent of the Commissioners (which may be general or specific); (but the Commissioners shall be taken to have consented to further disclosure by use of the computerised database of information disclosed by virtue of subsection (7))." (CRCA 2005, s.20(9))

Disclosure for the purposes of a function of HMRC
Public interest disclosure

Disclosure to proescuting authority

 

"(2)     But subsection (1) does not apply to a disclosure—

[...]

(b)     which is made in accordance with section 20 or 21,

[...]" (CRCA 2005, s.18(2)(b))

"(1)     Disclosure is in accordance with this section (as mentioned in section 18(2)(b)) if made—

(a)     to a prosecuting authority, and

(b)     for the purpose of enabling the authority—

(i)     to consider whether to institute criminal proceedings in respect of a matter considered in the course of an investigation conducted by or on behalf of Her Majesty's Revenue and Customs,

(ii)     to give advice in connection with a criminal investigation or criminal proceedings or

(iii)     in the case of the Director of Public Prosecutions, to exercise his functions under, or in relation to, Part 5 or 8 of the Proceeds of Crime Act 2002 (c 29)." (CRCA 2005, s.21(1))

 

Prosecuting authority

"(2)     In subsection (1) “prosecuting authority” means—

(a)     the Director of Public Prosecutions,

(b)     in Scotland, the Lord Advocate or a procurator fiscal, and

(c)     in Northern Ireland, the Director of Public Prosecutions for Northern Ireland." (CRCA 2005, s.21(2))

Criminal investigation

(2A)     In subsection (1) “criminal investigation” means any process—

(i)     for considering whether an offence has been committed,

(ii)     for discovering by whom an offence has been committed, or

(iii)     as a result of which an offence is alleged to have been committed." (CRCA 2005, s.21(2A))

 

Restrictions on further disclosure

(3)     Information disclosed to a prosecuting authority in accordance with this section may not be further disclosed except—

(a)     for a purpose connected with the exercise of the prosecuting authority's functions, or

(b)     with the consent of the Commissioners (which may be general or specific)." (CRCA 2005, s.21(3))

 

Offence

"(4)     A person commits an offence if he contravenes subsection (3).

 

(5)     It is a defence for a person charged with an offence under this section 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.

 

(6)     A person guilty of an offence under this section shall be liable—

(a)     on conviction on indictment, to imprisonment for a term not exceeding two years, to a fine or to both, or

(b)     on summary conviction, to imprisonment for a term not exceeding 12 months, to a fine not exceeding the statutory maximum or to both.

 

(7)     A prosecution for an offence under this section may be instituted in England and Wales only by or with the consent of the Director of Public Prosecutions

 

(8)     A prosecution for an offence under this section may be instituted in Northern Ireland only—

(a)     by the Commissioners, or

(b)     with the consent of the Director of Public Prosecutions for Northern Ireland.

 

(9)     In the application of this section to Scotland or Northern Ireland the reference in subsection (6)(b) to 12 months shall be taken as a reference to six months." (CRCA 2005, s.21(4) - (5))

Disclosure to proescuting authority

For the purposes of civil proceedings

 

"(2)     But subsection (1) does not apply to a disclosure—

[...]

(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,

[...]" (CRCA 2005, s.18(2)(c))

FTT proceedings are civil proceedings

"[42] I reach a similar conclusion in relation to section 18(2)(c). That permits HMRC to make disclosure for the purposes of civil proceedings. The term "civil proceedings" is not defined in the CRCA but [HMRC] submits that the term extends to FTT appeals, a proposition with which no one takes issue, and which I do not doubt. Section 18(2)(c) seems particularly apt on the facts of this appeal, where civil proceedings are extant and where HMRC wishes to make disclosure to assist one of the parties to those proceedings." (Mitchell and Bell v. HMRC [2023] EWCA Civ 261)

For the purposes of a criminal investigation or proceedings

 

"(2)     But subsection (1) does not apply to a disclosure—

[...]

(d)     which is made for the purposes of a criminal investigation or criminal proceedings (whether or not within the United Kingdom) relating to a matter in respect of which the Revenue and Customs have functions,

[...] " (CRCA 2005, s.18(2)(d))

For the purposes of civil proceedings
For the purposes of a criminal investigation or proceedings

Pursuant to an order of a court

 

"(2)     But subsection (1) does not apply to a disclosure—

[...]

(e)     which is made in pursuance of an order of a court,

[...]" (CRCA 2005, s.18(2)(e))

Includes an order by the FTT

"[43] Section 18(2)(e) operates where disclosure is ordered by "a court" which I would accept includes a tribunal, as Mr Puzey submits. In this case, at least so far as the disputed Level 2B (some) and Level 4 documents are concerned, disclosure has not been ordered and this exception is not engaged. However, to the extent that the FTT has ordered disclosure to Mr Bell of other levels of Disputed Documents, this exception is engaged, because HMRC will make disclosure of those documents pursuant to the FTT's order." (Mitchell and Bell v. HMRC [2023] EWCA Civ 261)

Pursuant to an order of a court

For the purposes of an inspection by HM Inspector of Constabulary

 

"(2)     But subsection (1) does not apply to a disclosure—

[...]

(f)     which is made to Her Majesty's Inspectors of Constabulary, the Scottish inspectors or the Northern Ireland inspectors for the purpose of an inspection by virtue of section 27,

[...]" (CRCA 2005, s.18(2)(f))

To the Director General of the Independent Office for Police Conduct

 

"(2)     But subsection (1) does not apply to a disclosure—

[...]

(g)     which is made to the Director General of the Independent Office for Police Conduct, or a person acting on the Director General's behalf, for the purpose of the exercise of a function by virtue of section 28, 

[...]" (CRCA 2005, s.18(2)(g))

For the purposes of an inspection by HM Inspector of Constabulary
To the Director General of the Independent Office for Police Conduct

With consent

 

"(2)     But subsection (1) does not apply to a disclosure—

[...]

(h)     which is made with the consent of each person to whom the information relates,

[...]" (CRCA 2005, s.18(2)(h))

With consent

To Revenue Scotland

 

"(2)     But subsection (1) does not apply to a disclosure—

[...]

(i)     which is made to Revenue Scotland in connection with the collection and management of a devolved tax within the meaning of the Scotland Act 1998,

[...]" (CRCA 2005, s.18(2)(i))

To Revenue Scotland

To Welsh Revenue

 

"(2)     But subsection (1) does not apply to a disclosure—

[...]

(j)     which is made to the Welsh Revenue Authority in connection with the collection and management of a devolved tax within the meaning of the Government of Wales Act 2006,

[...]" (CRCA 2005, s.18(2)(j))

To Welsh Revenue

Disclosure of information about one taxpayer to another taxpayer

 

Permitted if required for preparation of FTT appeal

"[40] Section 18(2) contains three exceptions to the duty of confidence which are potentially relevant in this appeal. The first is section 18(2)(a) which permits HMRC to make disclosure for the purposes of a function of HMRC which does not contravene any restriction imposed by the Commissioners. In this case, HMRC wished to disclose the Disputed Documents to Mr Bell so that he could have knowledge of them as he prepared for his FTT appeal, and as a matter of fairness. I would readily accept that the disclosure of documents in HMRC's possession, which HMRC considers to be required out of fairness in the context of ongoing tax litigation, is part of HMRC's function of collection and management of the tax. It has not been suggested that for HMRC to have disclosed the Disputed Documents would have contravened any restriction imposed by HMRC." (Mitchell and Bell v. HMRC [2023] EWCA Civ 261)

Not limited to pleaded issues

"[41] Mr Hickey says that as a matter of common law, in the context of an ongoing dispute before the FTT, there is a further condition to be read into section 18(2)(a), namely that the proposed disclosure must be relevant to the issues raised in the parties' pleaded cases. I reject that submission. Section 18(2)(a) contains no such condition on its face. Nor does the scheme and purpose of section 18 require it: section 18 balances the individual's right to confidentiality against the desirability of disclosure in certain instances, in the context of HMRC fulfilling their statutory functions which are themselves functions of a public nature conducted by a public body in the public interest. There may very well be instances where HMRC wishes to disclose material even though that material is not strictly relevant to an issue pleaded in the course of an FTT appeal but HMRC considers that disclosure would be in the wider public interest. For example, HMRC may be in possession of material which might exonerate a taxpayer in the context of that taxpayer's FTT appeal but the issue to which that material goes remains unpleaded because the taxpayer is not aware of its existence or content. The contrary conclusion, that HMRC should be prohibited from disclosing such material because the pleadings do not raise the precise issue to which that document might go, is inimical to the public interest and would be an absurd outcome. I accept the general proposition that HMRC's discretion to make disclosure is not unbounded: limits exist in the terms of section 18(2) itself, and the ordinary obligations imposed by public law would apply, so, for example, HMRC could not make disclosure exercising its powers under section 18(2)(a) if to do so would be irrational. For these reasons I reject Mr Hickey's submission that relevance to the pleaded case is a condition of section 18(2)(a). I conclude that section 18(2)(a) would apply, at least in principle, if HMRC wished to make disclosure of the Disputed Documents to Mr Bell." (Mitchell and Bell v. HMRC [2023] EWCA Civ 261)

Disclosure of information about one taxpayer to another taxpayer

FTT does not have jurisdiction over exercise of s.18 powers by HMRC

 

But can order disclosure of information falling within s.18

The practical position appears to be that HMRC can be ordered by the FTT to provide information covered by s.18 and, if they are so ordered, s.18(2)(e) will apply to permit disclosure. The relevance of the FTT not having jurisdiction over s.18, therefore, would be if the taxpayer whose information it is objected to disclosure on grounds based on s.18. 

"I can see no reason in principle why HMRC should not have asked the FTT to exercise its case management powers under Rule 5 in relation to disclosure of the Disputed Documents. HMRC's mistake was to connect the exercise of those case management powers with section 18(2)(c). But if section 18(2)(c) is excised from the equation, there is no difficulty in terms of jurisdiction. To the extent that the FTT made orders for disclosure under Rule 5 in relation to other levels of Disputed Documents, those orders are binding on the parties to the FTT appeal and find recognition in section 18(2)(e)." (Mitchell and Bell v. HMRC [2023] EWCA Civ 261, Whipple LJ)

"[72] All three of us agree that Rule 5 of the FTT Rules does not confer any jurisdiction on the FTT to interfere with the exercise by HMRC of its powers under section 18 of the CRCA. HMRC did not need Mr Mitchell's consent, or any court order, to make disclosure under section 18.
[73] It is at this stage that the views of Arnold LJ and Whipple LJ diverge. Arnold LJ concludes that, on the facts of this case, the FTT therefore had no jurisdiction to make the order that it did. In particular, he relies on the wording of HMRC's application (which referred to the seeking of "permi[ssion]" to disclose and cited section 18(2)(c)). There was, in Arnold LJ's view, no jurisdiction under Rule 5 either to permit or prevent HMRC from disclosing the documents under section 18. Whipple LJ, on the other hand, agrees that HMRC's application was misconceived in so far as it relied on (or referred to) section 18, but finds that that mistake did not deprive the FTT of its ordinary case management powers, including under Rule 5. However, the FTT judge erred in its approach to the exercise of that jurisdiction.
[74] I prefer the reasoning of Whipple LJ, including at paras 67 to 70 above. As she says at para 52, the two regimes (under s. 18 and Rule 5) can co-exist independently and provide alternative routes to disclosure in the context of a FTT appeal. The FTT Judge was well alive to the limits of her jurisdiction in relation to section 18 (see [22] of her judgment), and Rule 5(3)(d) was fairly and squarely in play on the face of HMRC's application. I see no difficulty in principle with the FTT Judge exercising her (very broad) case management powers under Rule 5 so as to assist the parties and progress the appeal in accordance with the overriding objective in Rule 2 of the Rules." (Mitchell and Bell v. HMRC [2023] EWCA Civ 261, Carr LJ)

FTT does not have jurisdiction over exercise of s.18 powers by HMRC
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