Peter Marano v The Commissioners for HMRC

The Court of Appeal considered the proper construction of section 103 of the Finance Act 2020 and whether that provision removes the requirement for HMRC to prove the involvement of an "officer of the Board" when issuing notices under section 8 Taxes Management Act 1970 or penalty assessments under paragraph 18 of Schedule 55 Finance Act 2009. The court accepted the Upper Tribunal's view that section 103 permits "HMRC" as a body to carry out anything capable of being done by an officer (whether by computer or otherwise) and that acts done by HMRC in that way have the same effect as if done by an officer, subject to the saving in s.103(6). The appeal was dismissed because the statutory words are broad, the contemporaneous materials support retrospective validation of automated functions, and s.103 moves the legal focus from proving a particular officer's involvement to proving that the notice or assessment emanated from HMRC.

Background and procedural history.

The appellant, Mr Marano, challenged HMRC penalty assessments for late submission of a self-assessment tax return for 2012/13. The First-tier Tribunal dismissed his appeal (TC/2018/05611) after finding the relevant notices and penalties had been issued under HMRC officers' authority (inferred from computer records). The Upper Tribunal (UT/2020/000246) revisited those findings in light of Rogers & Shaw and the subsequently enacted section 103 Finance Act 2020 and considered whether HMRC had to prove officer involvement in the issuance of notices and penalties.

Nature of the claim / relief sought.

• Mr Marano sought to quash penalty assessments and to require HMRC to prove that notices under section 8 TMA 1970 and penalty assessments under Schedule 55 paragraph 18 were authorised by an "officer of the Board".

Issues for decision.

1. Whether, under pre-existing authorities (notably Rogers & Shaw), HMRC must prove that an officer authorised the giving of a notice under section 8 TMA 1970;
2. Whether paragraph 18 of Schedule 55 requires that penalty assessments be shown to have been made and notified under the authority of an officer;
3. Whether section 103 FA 2020 removes the need to prove individual officer involvement by validating acts done by "HMRC" (including automated processes) as equivalent to acts of an officer, and the effect of s.103(6) saving provision.

Court's reasoning and conclusions.

The Court of Appeal carried out a purposive and contextual construction of section 103. It held that the provision is drafted broadly: anything capable of being done by an officer may be done by "HMRC" (whether by computer or otherwise) and anything done by HMRC in that way has the same effect as if done by an officer. The court rejected the appellant's narrower reading that would import the two-stage structure of section 113(1B) TMA 1970 or require proof of the involvement of an officer of a particular kind. The court treated "HMRC" as the departmental body (composed of Commissioners and officers) and concluded that the saving in s.103(6) is consistent with the interpretation that s.103 retrospectively validates automated HMRC functions except where a court before 11 March 2020 had already held an act to be of no effect for lack of officer authority. The contemporaneous ministerial materials and explanatory notes supported that legislative purpose. Because Mr Marano did not dispute that the notices and assessments emanated from HMRC, the UT and Court of Appeal were entitled to dismiss his appeal.

The appeal is dismissed. The Court held that section 103 Finance Act 2020 authorises HMRC as a body to do anything capable of being done by an officer of Revenue and Customs (whether by computer or otherwise) and that anything done by HMRC in that way has the same legal effect as if done by an officer. On that basis, it is not necessary in every case to adduce evidence of the direct involvement of a particular officer; instead HMRC must show that the notice or assessment emanated from HMRC. The saving in s.103(6) preserves prior court determinations made before 11 March 2020 that a particular act was of no effect for lack of officer authority.

First-tier Tribunal (Tax Chamber) decision: TC/2018/05611 (FTT dismissed appellant's challenge). Upper Tribunal (Tax & Chancery Chamber): UT/2020/000246 (considered Rogers & Shaw and section 103 FA 2020; concluded section 103 validates HMRC automated functions and required proof only that the notices/assessments emanated from HMRC). Appeal to Court of Appeal: [2024] EWCA Civ 876 (this judgment).