Ingenious Media Holdings Plc & Anor, R (on the application of) v HM Revenue & Customs

HMRC’s statutory duty of taxpayer confidentiality does not prevent limited disclosure where the disclosure has a rational and sufficiently direct connection with HMRC’s tax-collection functions. The court reviews evaluative judgments by HMRC on a rationality basis and does not substitute its own assessment.

HMRC may maintain responsible relations with the press, correct public misapprehensions, obtain information, and communicate its scepticism about questionable tax arrangements. Confidentiality and privacy interests narrow the permissible discretion, and disclosure must remain limited and proportionate. Policy guidance may generate a legitimate expectation of consistent treatment, but the decision-maker’s evaluative judgment remains reviewable only within ordinary public-law limits.

The claimants sought judicial review of HMRC’s decision, made by its Permanent Secretary for Tax, to disclose information about them during an off-the-record briefing with two journalists from The Times. The journalists later published material referring to the claimants and to HMRC’s view of film investment schemes.

The claimants alleged breaches of section 18 of the Commissioners for Revenue and Customs Act 2005, HMRC’s published guidance, section 6 of the Human Rights Act 1998 read with Articles 8 and A1P1 of the Convention, and abuse of power. The central issues were whether the disclosures were for HMRC’s functions, whether they complied with the guidance, and whether they were rational, necessary and proportionate.

1. Statutory confidentiality. The disclosures fell within the lawful scope of section 18 of the Commissioners for Revenue and Customs Act 2005. There was a rational connection between the briefing and HMRC’s function of collecting tax efficiently and cost-effectively. HMRC could lawfully seek co-operation with journalists, correct public misapprehensions, obtain information about avoidance schemes and deter participation in arrangements which it regarded as outside the spirit of the tax code.
2. The court’s role was not to second-guess evaluative judgments made by an experienced tax authority during the course of a conversation. The disclosures were limited, made to apparently responsible journalists in an off-the-record setting, and did not disclose private tax files or information supplied by the claimants. They therefore fell within the lawful parameters of the statutory discretion.
3. Guidance and legitimate expectation. HMRC’s guidance did not constitute a formal statutory restriction under section 18(2)(a)(ii). It was guidance intended to assist officials in complying with legal rules. Nevertheless, policy guidance can give rise to enforceable legitimate expectations, including where the claimant did not know of or rely on it, if public-law principles require like cases to be treated alike. The claim failed because the decision-maker complied with the guidance’s standard of necessity, properly understood as requiring a sufficiently direct connection with HMRC’s functions.
4. Convention rights. Disclosure by a public authority of confidential information about a citizen’s tax relationship ordinarily interferes with Article 8(1), but the limited disclosures were justified under Article 8(2). They pursued legitimate objectives and were proportionate. The disclosures did not sufficiently interfere with the claimants’ reputational interests to engage Article 8; alternatively, any interference was justified.
5. Any interference with possessions for the purposes of A1P1 could include both intended and actual effects, but the briefing was proportionate to legitimate public-interest objectives. The state may discourage lawful conduct through less drastic measures than prohibition. The claimants’ abuse-of-power allegations also failed. All claims were dismissed.