Disclosure of a Subject Access Report - Chemists (a firm) v HM Revenue & Customs [2009] UKFTT 00007 (TC) (27 February 2009)

May 18th 2009

A Bank, at which Chemists banked, made a Subject Access Report (SAR) to the National Criminal Investigation Service (NCIS). The SAR said Chemists had paid in cash and got the Bank to transfer the balance to accounts in India and had changed £200,000 of old notes for new.   NCIS passed the information to HMRC who mounted an enquiry into Chemists- suspecting understatement of profits. S20 Notices were issued to the Bank which supplied information- most of which Chemists were shown.   Chemists wanted to see the SAR and also for Bank staff to give evidence as they wanted to challenge the information. The Bank was unhappy about that prospect as they felt their staff could be at risk and their money-laundering processes could be compromised and claimed public interest immunity.   The Commissioner reviewed the SAR and as it did not give people’s names and was virtually identical to the report HMRC got from NCIS he authorised disclosure of it to Chemists- subject to some reference numbers being covered up. He did not consider, at that stage, the request for witness summons to be issued to Bank staff. 

Chemists also applied for costs on the basis that the conduct of the Revenue in resisting disclosure of the SAR has been wholly unreasonable. But the Commissioner said:

“Whilst I understand the frustration of the Appellants that the Revenue have included in a witness statement references to anonymous allegations, I do not consider that the actions of the Revenue have been wholly unreasonable. Hearsay evidence is in principle admissible before the Special Commissioners, and the Revenue cannot be criticised merely for seeking to introduce such evidence. I also note that the Revenue have not resisted the disclosure of the SAR in the hearings before me. For these reasons I am not prepared to make an award of costs against them.”