Good Law Project Ltd v HM Revenue and Customs & Anor

Section 18(2)(c) of the Commissioners for Revenue and Customs Act 2005 permits HMRC to disclose information for civil proceedings concerning a matter within its functions. The initial decision whether that condition is met is HMRC’s. The provision does not require disclosure to be necessary. The necessity reasoning in R (Ingenious Media) v HMRC [2016] 1 WLR 4164 concerned materially different statutory language. Where the disclosure is limited and the judicial review raises serious grounds, open justice may justify disclosure of whether a protective VAT assessment has been made. Ordinary restrictions on use of disclosed material apply.

The claimant brought judicial review proceedings challenging HMRC’s failure to raise a protective VAT assessment on Uber London Ltd. HMRC applied under section 18 of the Commissioners for Revenue and Customs Act 2005 for permission to disclose whether it had decided to assess Uber for a particular accounting period, subject to restrictions on onward disclosure.

The application concerned the interaction between taxpayer confidentiality, HMRC’s statutory disclosure powers, the duty of candour and open justice. The central issues were whether disclosure under section 18(2)(c) required strict necessity and whether a separate court order under section 18(2)(e) was required.

1. Application granted in substance. HMRC could disclose whether a protective assessment had been made. Disclosure was limited to GLP’s director and officers. A separate wider-disclosure restriction and penal notice were unnecessary because CPR 31.22 applied and no special need was shown (paras [44]-[47]).
2. Section 18(2)(c) of the Commissioners for Revenue and Customs Act 2005 creates an exception to the prohibition in section 18(1) where disclosure is made for civil proceedings relating to a matter in respect of which HMRC has functions. The initial decision is for HMRC. Otherwise section 18(2)(c) would be otiose alongside section 18(2)(e) (para [35]).
3. No necessity test is implied into section 18(2)(c). The wording contains no such requirement, and importing one would be inconsistent with the reasonable-belief defence in section 19. The criminal sanction for breach reinforces strict construction of the statutory language (para [36]).
4. R (Ingenious Media) v HMRC [2016] 1 WLR 4164 concerned section 18(2)(a)(i), whose breadth and vagueness engaged the principle of legality. That reasoning did not govern the distinct civil-proceedings exception in section 18(2)(c), which involved fair and open justice considerations absent from Ingenious Media (paras [37]-[39]).
5. A claim brought merely as a fishing expedition could be defended without confidential disclosure. This claim raised serious grounds and was not shown to be a mechanism for obtaining confidential information (paras [40]-[41]). The limited disclosure sought would, in any event, cause only slight intrusion into Uber’s confidentiality or article 8 rights (para [42]).
6. HMRC should in future decide for itself whether section 18(2)(c) applies. It may give advance notice so that the taxpayer can seek an order prohibiting disclosure. The application under section 18(2)(e) was unnecessary, although understandable on the facts (para [44]).