Sarah Jane Turcan & Ors v The Commissioner For HMRC
[2024] UKFTT 869 (TC)
Mark Mitchell & Anor. v The Commissioners for HMRC
10 March 2023
[2023] EWCA Civ 261
Court of Appeal
Two guys appealed tax penalties. The tax office wanted to share information about one guy with the other, but the first guy said no. The court said the tax office could share the information anyway, because it has the power to do so, and the lower courts got it wrong by focusing on whether the information was relevant instead of whether it was fair to share it.
Key Facts
- •HMRC investigated Mr. Mitchell's tax affairs, leading to Personal Liability Notices (PLNs) against him and Mr. Bell for unpaid VAT penalties.
- •Mr. Bell and Mr. Mitchell appealed the PLNs to the First-tier Tribunal (FTT).
- •HMRC sought to disclose documents from Mr. Mitchell's investigation to Mr. Bell, but Mr. Mitchell objected.
- •The FTT partially allowed the disclosure, excluding certain documents deemed irrelevant.
- •Both Mr. Bell and Mr. Mitchell appealed to the Upper Tribunal (UT), and Mr. Bell further appealed to the Court of Appeal.
- •The main dispute concerned the FTT's and UT's decisions on the relevance of certain documents and HMRC's power to disclose them.
Legal Principles
HMRC's functions include the collection and management of tax (Section 5, CRCA 2005).
Commissioners for Revenue and Customs Act 2005 (CRCA)
HMRC can use information acquired for one function in connection with another (Section 17, CRCA 2005).
CRCA
HMRC is prohibited from disclosing information except under specific circumstances (Section 18, CRCA 2005).
CRCA
Taxpayer confidentiality is a general principle, with exceptions for disclosure necessary for HMRC's functions (R (Ingenious Media Holdings plc) v Revenue and Customs Commissioners).
R (Ingenious Media Holdings plc) v Revenue and Customs Commissioners [2016] UKSC 54
The FTT has case management powers, including disclosure orders, subject to the overriding objective of dealing with cases fairly and justly (FTT Rules 2, 5(3)(d)).
Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009
FTT disclosure is narrower than standard civil procedure disclosure (E Buyer UK Ltd v Revenue and Customs Commissioners, HMRC v Smart Price Midlands Ltd).
E Buyer UK Ltd v Revenue and Customs Commissioners [2017] EWCA Civ 1416; HMRC v Smart Price Midlands Ltd [2019] EWCA Civ 841
The FTT's decision on relevance is a case management decision, subject to a high threshold for appeal (BPP Holdings Ltd v Commissioners for HM Revenue and Customs).
BPP Holdings Ltd v Commissioners for HM Revenue and Customs [2017] 1 WLR 2945
Outcomes
The Court of Appeal allowed Mr. Bell's appeal.
The FTT lacked jurisdiction to determine HMRC's disclosure under section 18(2) CRCA. HMRC had independent power to disclose the documents under sections 18(2)(a) and (c) CRCA, and the FTT's decision on relevance was flawed.