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19 Oct 2016 05:13pm

Ingenious wins Supreme Court battle against HMRC

The Supreme Court has ruled unanimously that HMRC unlawfully disclosed confidential information to journalists about financial advisors Ingenious Media, known for promoting film investment schemes

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Caption: Court rules that the Revenue had breached its duty of confidentiality

The case centred around a press briefing given to two Times journalists by then HMRC permanent secretary for tax Dave Hartnett in 2012.

During the course of the briefing, agreed to be “off the record”, the journalists instigated a conversation with Hartnett about Ingenious, its CEO Patrick McKenna about a film investment scheme. Some of the information was used in a later Times story.

A 2013 High Court judgment struck out Ingenious' breach of confidentiality claim against HMRC on the basis that the briefing was off the record. Ingenious also lost an appeal in 2015.

The highest court in the land today, however, ruled that the Revenue had breached its duty of confidentiality.

Lord Toulson, the Supreme Court justice, said in his ruling, “The information supplied by Mr Hartnett to the journalists about Mr McKenna and Ingenious Media was confidential in nature, in respect of which HMRC owed a duty of confidentiality.”

“The fact that Mr Hartnett did not anticipate his comments being reported is not a justification for making them. The desire to foster good relations with the media and to publicise HMRC’s view about tax avoidance schemes and speculation that the journalists may have subsequently informed Mr Hartnett about other tax avoidance schemes do not provide sufficient justification for the disclosures either.”

Ingenious has been awarded costs and is now considering whether to seek compensation.

Commenting on the judgement, an HMRC spokesperson said the Revenue is “naturally disappointed”.

“HMRC defended this case because it considered that the disclosure made by Mr Hartnett was lawful. However, the Supreme Court has decided otherwise and we will examine the judgment in detail.

“It is important to clarify that this judgment has no bearing on the three Ingenious film partnerships considered by the first tier tribunal, where HMRC was successful. This protected around £400m in revenues for the exchequer,” they added.

An Ingenious spokesperson said they are “delighted” and that it “was never about restricting HMRC's ability to collect taxes, nor was it about preventing the press from investigating public interest stories". It was about “upholding the basic legal principle that HMRC owe a duty of confidentiality to each and every tax payer and their affairs".

Raymond Doherty

 

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