The Supreme Court has unanimously allowed Ingenious Media’s application for judicial review against HMRC for disclosing information to the Times newspaper. The decision overturns that of the Court of Appeal, for which, see Legal update, Court of Appeal dismisses Ingenious’ appeal in judicial review application against HMRC. The decision is significant as the Court ruled that HMRC’s entitlement to disclose taxpayer information in section 18(2)(a)(i) of the Commissioners for Revenue and Customs Act 2005, which allowed disclosure for the purposes of a HMRC function, must be construed narrowly .
The Supreme Court held that the statutory duty of confidentiality owed by HMRC was founded in the well-established common law of confidentiality; accordingly, any exceptions to that duty must be narrowly interpreted to avoid eroding the principle of legality, which prevents fundamental rights from being overridden by vague or general words. If section 18(2)(a)(i) was to be given the breadth of meaning HMRC suggested, section 18 would have been more explicit about limiting the duty of confidentiality. Further, the Court held that, although brought by way of judicial review, the claim was, essentially, one for breach of confidentiality, which was a matter that fell not within HMRC’s discretion (subject to rationality), but within the Court’s judgment. Therefore, the Court was required to approach the disclosure as if it were the primary decision-maker, and the Court of Appeal and the High Court had erred in declining to do so. The Court noted that, as a general rule, and certainly here, the reasons for the disclosure, and the fact that HMRC did not expect its comments to be published, were irrelevant to the fact that it was made in breach of HMRC’s duty of confidentiality.
Case: R (Ingenious Media holdings plc and another) v HMRC [2016] UKSC 54 (19 October 2016) (Lady Hale and Lords Mance, Kerr, Reed and Toulson) (Bailii).