Global Freedom of Expression

R (Ingenious Media) v. Commissioners for Her Majesty’s Revenue and Customs

Closed Contracts Expression

Key Details

  • Mode of Expression
    Press / Newspapers
  • Date of Decision
    October 19, 2016
  • Outcome
    Reversed Lower Court
  • Case Number
    2016 UKSC 54
  • Region & Country
    United Kingdom, Europe and Central Asia
  • Judicial Body
    Supreme (court of final appeal)
  • Type of Law
    Administrative Law, Civil Law
  • Themes
    Privacy, Data Protection and Retention
  • Tags
    Public Officials, Confidentiality

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Case Analysis

Case Summary and Outcome

The UK Supreme Court found that a senior tax official had not been permitted to disclose confidential information in an “off the record” interview with The Times newspaper. The case arose from an interview given by a senior official from Her Majesty’s Revenue and Customs (HMRC) to a journalist about an investment firm’s film production schemes benefiting from certain tax reliefs. HMRC argued that the disclosure was justified under a statutory provision that permitted disclosures where they were “made for the purposes of a function of [HMRC]”. HMRC alleged that the disclosure was made for the purpose of fostering good relations with the financial press. The UK Supreme Court held that the relevant statutory provision should be read narrowly so as to only permit disclosure that was reasonably necessary for HMRC to fulfil its primary function of revenue collection and management. In this case, the UK Supreme Court held that the disclosure was unjustified.


Mr Patrick McKenna was a former senior partner of Ingenious Media Holdings plc, an investment and advisory group that specialised in film production schemes that benefited from certain tax reliefs.

On June 14, 2012, the Permanent Secretary for Tax in Her Majesty’s Revenue and Customs (HMRC), Mr. Hartnett, gave an “off the record” interview to two journalists from The Times newspaper to discuss tax avoidance. One week later, they published two articles on the issue of film schemes. These articles contained direct quotations from Mr. Hartnett, although they did not identify him as the source for the story. The articles contained the allegations that Mr. McKenna was viewed as a threat by HMRC, and that HMRC believed that his schemes had significantly contributed to investors having avoided at least £5 billion in tax through film schemes. The article also disclosed Mr. McKenna’s involvement in a long-running revenue inquiry into three of his partnerships.

Ingenious Media and Mr. Mckenna challenged Mr. Hartnett’s decision to disclose information to the press by way of judicial review. The operative provision that was examined by the courts during the judicial review proceedings was Section 18 of the Commissioners for Revenue and Customs Act 2005 (CRCA). This provision imposed an obligation on revenue and customs officials to not disclose information held by HMRC in connection with their functions. However, this provision also contained a number of exemptions to the non-disclosure obligation, including exemptions for disclosure in relation to criminal investigations and civil proceedings concerning the functions of HMRC. Section 18(2)(a)(i) CRCA created an exemption for disclosures “made for the purposes of a function of the Revenue and Customs”.

Mr. Hartnett clarified that he gave the interview with the journalist in order to try to establish good relations with the financial press. This relationship provided a way by which HMRC’s views on tax avoidance could be disseminated and emphasized. He had also hoped that the journalists would trade information known to them regarding tax avoidance agreements that were unknown to HMRC. However, since he had made it clear at the outset that the interview would be “off the record”, he hadn’t anticipated that it would be published.

Justice Sales, at first instance, dismissed the claim against HMRC. Justice Sales held that he could only intervene “if satisfied that Mr. Hartnett could not rationally take the view that speaking to the journalists as he did would assist HMRC in the exercise of its tax collection functions.” [para. 14] Justice Sales dismissed the claim since the disclosure was rational, made for a legitimate purpose and proportionate. Justice Sales’ judgment was upheld by the Court of Appeal. The Court of Appeal held that a wide meaning should be given to the exemption under section 18(2)(a)(i) CRCA, and that it was not for the court to “review all the facts de novo as though it were the primary decision maker”.

Decision Overview

Lord Toulson delivered the unanimous opinion of the Supreme Court (Court). He identified three main issues that emerged from the decision of the lower courts. These were as follows;

  1. What is the proper construction of the Section 18(2)(a)(i) CRCA?
  2. What is the proper approach of the Court in judging the conduct of Mr Hartnett?
  3. What is the significance of Hartnett’s understanding that his interview with the journalists was to be “off the record”?

In addressing the first issue, the Court reiterated that a duty of confidentiality is owed to an individual where their personal or confidential information is obtained in the exercise of a legal power or in furtherance of a public duty. The Court stressed that this duty requires that the information not be used for another purpose. The Court noted that HMRC is entitled to receive and hold certain information “for the purpose of enabling it to assess and collect (or pay) what is properly due from (or to) the tax payer.” [para.17]

However, the Court also noted that this duty may be overridden by explicit statutory provisions that require or authorize the recipient of the information to make a disclosure. The Court thereafter proceeded to examine the scope of section 18(2)(a)(i) CRCA. HMRC proposed that the provision should be given a broad interpretation allowing disclosure which “in the view of HMRC is necessary or expedient or incidental or conducive to or in connection with the exercise of the functions of the collection and management of revenue.” [para. 19] However, the Court pointed out that such a wide interpretation would render redundant other exemptions, including those for the purpose of criminal or civil proceedings relating to HMRC’s functions. Moreover, the Court noted with concern that the fundamental rights of the taxpayers would be undermined by the ambiguity of such a construction.

The Court noted that HMRC’s duty of confidentiality had been long established, and stated that “in passing [CRCA], Parliament cannot be supposed to have envisaged that by section 18(2)(a)(i) it was authorising HMRC officials to discuss its views of individual taxpayers in off the record discussions, whenever officials thought that this would be expedient for some collateral purpose connected with its functions, such as developing HMRC’s relations with the press.” [para. 22] The Court reasoned that, if such wide discretion were to be conferred limited only by a rationality test, it would have significantly emasculated the primary duty of confidentiality recognized in Section 18 CRCA. As a result, the Court held that section 18(2)(a)(i) CRCA should be interpreted narrowly to permit disclosure that was reasonably necessary for HMRC to fulfill its primary function of revenue collection and management.

The Court then considered the approach to be adopted when considering Mr. Hartnett’s conduct. The Court emphasized that public bodies are not immune from the ordinary application of common law, including the law relating to confidentiality, simply because the exercise of their administrative power can be subject to judicial review. The Court also emphasized that it was for the courts to determine whether there had been a breach of confidentiality.

The Court finally considered the significance of Mr. Hartnett’s understanding that the interview would be “off the record”. The Court noted that disclosure of confidential information may be permissible sometimes and on a restricted basis. Nonetheless, the Court emphasized that “an impermissible disclosure of confidential information is no less impermissible just because the information is passed on in confidence”. [para. 31]

The Court concluded that the information supplied by Mr Hartnett to the journalist about Mr. McKenna and Ingenious Media was confidential in nature, in respect of which HMRC owed a duty of confidentiality to them under Section 18(1) CRCA. The Court found that “a desire to foster good relations with the media or to publicise HMRC’s views about elaborate tax avoidance schemes cannot possibly justify a senior or any other official of HMRC discussing the affairs of individual tax payers with journalists.” [para. 34] The Court stated that it was a serious concern that HMRC officials would be supplying confidential information about individuals to the media on a non-attributable basis. The Court did not say that such disclosures would never be justified, recognising that there may be a case where “HMRC officials might be engaged in an anti-smuggling operation which might be in danger of being wrecked by journalistic investigations and where for operational reasons HMRC might judge it necessary to take the press into its confidence.” [para. 35] The Court highlighted that such cases should be exceptional. The Court concluded that the disclosure was not justified under section 18(2)(a) and, therefore, the appeal was allowed.

Decision Direction

Quick Info

Decision Direction indicates whether the decision expands or contracts expression based on an analysis of the case.

Contracts Expression

This decision contracts expression by narrowly defining the circumstances under which a tax official may disclose information held by the tax authorities. The UK Supreme Court stressed the importance of confidentiality when tax authorities are managing tax payers’ information, and it could not accept that tax officials could speak “off the record” to journalists for the purpose of maintaining good relations with the press. Furthermore, the UK Supreme Court opined that the circumstances under which the tax authorities could take the press into their confidence would be exceptional. This decision will likely deter tax officials from speaking openly to the press about their work for fear that they would be found to be in breach of their duty of confidentiality.

Global Perspective

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Global Perspective demonstrates how the court’s decision was influenced by standards from one or many regions.

Table of Authorities

National standards, law or jurisprudence

  • U.K., Marcel v. Commissioner of Police of the Metropolis, [1992] Ch 225
  • U.K., In re Arrows Ltd (No 4), [1995] 2 AC 75
  • U.K., McKennitt v. Ash, [2006] EMLR 10
  • U.K., W v. Egdell, [1990] 1 Ch 359
  • U.K., R v. Inland Revenue Comrs, Ex p National Federation of Self-Employed and Small Businesses Ltd, [1982] AC 617
  • R v. Inland Revenue Comrs, Ex. p. Preston, [1985] AC 835
  • U.K., Conway v. Rimmer, [1968] AC 910
  • U.K., R (Public Law Project) v. Lord Chancellor, [2016] 3 WLR 387
  • U.K., Commissioners for Revenue and Customs Act 2005, section 18

Case Significance

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Case significance refers to how influential the case is and how its significance changes over time.

The decision establishes a binding or persuasive precedent within its jurisdiction.

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