Ingenious Media – UK Supreme Court finds that statutory exceptions to taxpayer confidentiality should be construed narrowly in light of the common law of confidentiality

A senior British tax official disclosed, in an “off the record” interview with some journalists, that the schemes of a particular promoter of film tax shelters had been generating large losses to the fisc, and they published this and other confidential information. HMRC argued that this disclosure was justified by a statutory provision which authorized a “disclosure … made for the purposes of a function” of HMRC, noting their “general desire to foster good relations with the media or to publicise HMRC’s views about elaborate tax avoidance schemes,” as well as to the possibility of getting tips from the journalists.

In rejecting HMRC’s position, Lord Toulson noted that under “the common law of confidentiality:”

where information of a personal or confidential nature is obtained or received in the exercise of a legal power or in furtherance of a public duty, the recipient will in general owe a duty to the person from whom it was received or to whom it relates not to use it for other purposes.

Under the “principle of legality,” this “fundamental right…cannot be overridden by general or ambiguous words,” as HMRC was trying to do here.

The same restrictive interpretive approach likely would be applied to ITA s. 241(4)(a), which authorizes the provision to any person of “information that can reasonably be regarded as necessary for the purposes of the administration or enforcement of this Act.”

Neal Armstrong. Summaries of Ingenious Media Holdings plc & Anor, R (on the application of) v Commissioners for HMRC [2016] UKSC 54 under s. 241(4)(a) and Statutory Intepretation - Principle of Legality.