The High Court has ruled that Her Majesty's Revenue and Customs ("HMRC") did not act in breach of confidentiality provisions in disclosing information about the Claimants in an "off-the-record" meeting with journalists. The High Court also rejected submissions that HMRC had acted in breach of legitimate expectation, Article 8 of the European Convention on Human Rights ("ECHR") (the right to respect for private life) or Article 1 of the First Protocol (the right to peaceful enjoyment of possessions). The Queen on the application of (1) Ingenious Media Holdings plc and (2) Patrick McKenna v HMRC [2013] EWHC 3258 (Admin)

Key points

  • The High Court rejected the submission that HMRC had violated confidentiality provisions in disclosing information, as the disclosure was made for the purpose of an HMRC function (maintaining good relations with the press) and was limited in extent.
  • HMRC did not impermissibly defeat a legitimate expectation as it acted in compliance with Guidance in deciding that it was reasonable to disclose the information.
  • HMRC did not violate the Claimants' rights under Article 8 or Article 1 of the First Protocol as the disclosure was made for legitimate reasons and was proportionate.


The First Claimant, Ingenious Media, is an investment group that promotes film schemes. Film schemes allow participating taxpayers to take advantage of tax reliefs. The Second Claimant, Mr McKenna, is the founder and CEO of Ingenious Media.

A journalist at The Times approached HMRC to ask for a background briefing on its approach to tax avoidance. It was agreed that two journalists would meet with the Permanent Secretary for Tax, David Hartnett, who would provide them with an "off-the-record" background briefing. The briefing took place on 14 June 2012. In response to the journalists' suggestion that HMRC had agreed unduly lenient settlements of tax liability with some taxpayers, Mr Hartnett noted that HMRC engages with individuals to stop tax avoidance. He referred to a notable individual in the film scheme industry, identified immediately as Mr McKenna by the journalists. He stated that film schemes were a £5 billion risk; that Mr McKenna had never left "his radar" and "he's a big risk for us"; and that film schemes are "scams for scumbags".

On 21 June 2012, The Times published an article about tax avoidance referring to Mr McKenna, including quotations from the background briefing. The following day, the Claimants' solicitors wrote to HMRC protesting at the release of information. They requested that HMRC issue a statement disclaiming the comments reported. HMRC declined to issue a statement. The Claimants then commenced judicial review proceedings.

Grounds of claim

  1. HMRC violated s.18 of the Commissioners for Revenue and Customs Act 2005 (the "Act"). Under s.18, HMRC officials "may not disclose information which is held…in connection with the function of the Revenue and Customs" unless the disclosure "is made for the purposes of a function of the Revenue and Customs" and "does not contravene any restriction imposed by the Commissioners". The function under discussion was the "collection and management" of tax. The Claimants submitted that the disclosures were not made "for the purposes" of a function of HMRC.

    The Court rejected this submission and held that there was a rational connection between the function of HMRC and the disclosures made. Mr Hartnett could rationally take the view that by maintaining good relations with the press and encouraging them to provide HMRC with information, the briefing would assist HMRC in the exercise of its function. The efficient and effective collection of tax is a matter of public interest and concern. Press coverage is a vital means of informing public debate. It also allows HMRC to provide accurate information to correct misapprehensions, thereby maintaining public confidence in the tax system (without which efficient collection of taxes could be jeopardised).

  2. Guidance IDG40430 gave rise to legitimate expectations on the part of the Claimants, which had been impermissibly defeated by the disclosures. Under the Guidance, HMRC may disclose customer information only where it is necessary for the purpose of HMRC functions.

    The High Court rejected this submission. It confirmed that the absence of detrimental reliance by the Claimants does not undermine an enforceable legitimate expectation where "one is dealing with a general statement of policy…and there is no question of the public authority changing that general policy" (Oxfam v HMRC [2009]). However, Mr Hartnett was compliant with IDG40430. 

  3. HMRC violated Mr McKenna's right to respect for his private life under Article 8 of the ECHR by making disclosures regarding his background, tax affairs and HMRC's opinion of him.

    The Court rejected this submission. It conceded that the release of confidential information about a citizen held by a public authority to journalists involves interference with the right to respect for private life. However, it concluded that the disclosures were "clearly lawful", having been made for legitimate objectives. Having regard to their limited and "off-the-record" nature, the disclosures were proportionate to these objectives.

  4. HMRC is liable for abuse of power, having deliberately targeted the Claimants without good reason by naming them to the journalists.

    The Court dismissed this allegation. It found that mention of the Claimants arose naturally in the context of the discussion, and Mr Hartnett did not target them out of any improper motive.

  5. The disclosure of HMRC's negative attitude to film schemes violated the rights of Ingenious Media under Article 1 of the First Protocol to the ECHR (the right to peaceful enjoyment of possessions), as it was made with the intention that potential investors be discouraged from investing in the schemes.

    The Court had reservations as to whether the loss of future business income could be regarded as an interference with a "possession", in view of the complex case law on the correct interpretation of that term in this context. However, the point was not raised by the parties and therefore the Court did not consider it further. The Court went on to find that any interference with the right was justified as a proportionate action taken to promote legitimate public interest objectives.


This judgement suggests that the courts are prepared to give a wide berth to HMRC on matters that depend upon evaluative judgements. Much of this judgement, however, depended upon the disclosures being made in an "off the record" meeting. HMRC could reasonably expect that the information would not be made public. It is not clear whether the disclosures would have remained lawful had they been made in full awareness that the information would be published.  The practice of 'naming and shaming' in the absence of any Court or Tribunal decision is not a usual one for HMRC and in other contexts HMRC officials may be prosecuted for unauthorised disclosure of information. It may also be worth noting that much of the information disclosed would have been publicly available.

The case is also an interesting example of the broad range of situations in which human rights grounds of challenge can be raised, and the difficulties in making a successful claim on such grounds in the face of public interest justification.