Peter Marano v The Commissioners for HMRC

Section 103 of the Finance Act 2020 has broad retrospective effect. It permits anything capable of being done by a tax officer to be done by HMRC, including through a computer, with the same legal effect. This applies even where the function would otherwise be assigned to an officer of a particular kind. HMRC means the body or department itself. The provision does not authorise artificial intelligence, but it removes the need to prove direct officer involvement in the criteria, establishment or operation of an automated process where the notice was issued by HMRC. The principle applies to notices to file tax returns and penalty assessments.

HMRC issued Mr Marano with a notice to file a self-assessment tax return for 2012/2013. After he failed to file it on time, HMRC issued late-filing penalties under Schedule 55 to the Finance Act 2009.

The First-tier Tribunal dismissed his appeal in decision TC/2018/05611, finding that the notice and penalties had been authorised through HMRC's systems. The Upper Tribunal held that the evidence was insufficient under the approach in HMRC v Rogers & Shaw, but concluded that section 103 of the Finance Act 2020 removed the need to prove individual officer authorisation. The central issue before the Court of Appeal was whether that construction was correct.

The Court of Appeal dismissed the appeal. Lady Justice Asplin gave the leading judgment, with which Lord Justice Nugee and Lord Justice Coulson agreed.

1. Section 103 of the Finance Act 2020 is expressed in broad and general terms. Anything capable of being done by an officer of Revenue and Customs under a taxation enactment may be done by HMRC, by computer or otherwise. The examples in subsection (2) are non-exhaustive, and subsection (3) gives the HMRC act the same effect as if it had been done by the relevant officer.
2. HMRC means the body or department itself, distinct from an individual officer. The body necessarily acts through individuals, whether or not computers are used. Section 103 does not authorise artificial intelligence. It does, however, remove the need to prove that an individual officer set the criteria for, authorised, established or operated the automated function. The focus is whether the notice was issued or sent by HMRC.
3. The earlier approach in HMRC v Rogers & Shaw [2019] UKUT 406 (TCC), which required evidence of officer authorisation in the circumstances then under consideration, did not govern the notices covered by section 103. The court applied the statutory construction principles stated in PACCAR v Competition Appeal Tribunal and Others [2023] UKSC 28, including the need to avoid a futile or pointless interpretation.
4. The same reasoning applies to a notice under section 8 of the Taxes Management Act 1970 and penalty assessments under paragraph 18 of Schedule 55 to the Finance Act 2009. Mr Marano did not dispute that the notices emanated from HMRC. The appeal therefore failed, and it was unnecessary to consider the alternative inference argument, the argument based on section 113 of the Taxes Management Act 1970, or the statute-always-speaking principle.

• Court of Appeal (Civil Division): Appeal dismissed. [2024] EWCA Civ 876.
• Upper Tribunal (Tax and Chancery Chamber): Held that the evidence was insufficient under the Rogers & Shaw approach, but that section 103 of the Finance Act 2020 made individual officer authorisation unnecessary where the notice was HMRC's notice.
• First-tier Tribunal (Tax Chamber): Dismissed Mr Marano's appeal and found that the notice and penalties had been authorised through HMRC's systems. Decision reference TC/2018/05611.