Legal Privilege
While it has long been the law that HMRC cannot use its information powers to obtain legally privileged material, there have been disputes over what material was in fact legally privileged. Para 23 (3) Schedule 36 FA 1998 gave HMRC the power to introduce regulations for the resolution of such disputes. The relevant regulations, SI 2009 1916 were enacted on 7 August 2009 and are explained in Revenue & Customs Brief 54/09.
HMRC Information Notices will now have to be even more carefully scrutinised.
The important elements are
- If an HMRC officer asks an unrepresented person for documents where legal professional privilege may be an issue, they should explain what documents may be protected by privilege.
- The person or anyone acting on their behalf shall specify in a list each disputed document or type of document so they can be identified. They should send the list to HMRC by the deadline given in the information notice.
- The officer should check the list and identify
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items they accept are privileged
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documents they do not need to see
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documents that they still need to see
- The officer then needs to contact HMRC’s Central Policy or the HMRC Solicitor for advice about items they still need to see. If Central Policy or the HMRC Solicitor agrees that some of these documents are not covered by privilege the officer must then contact the person and:
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explain why they think the document is not privileged
- tell the person they must send the document unless they disagree with HMRC’s view
- tell them what they need to do if they want the Tribunal to decide whether the document is subject to legal professional privilege
- The person must make an application to the Tribunal within 20 working days of the date of the HMRC letter.
- If during the course of an HMRC inspection there are disputed documents, the taxpayer should place them in a container that prevents the documents being seen. They will then seal, label and sign the container. The officer will countersign and take custody of the container.
- The officer must ensure that container, with its seal intact, reaches the Tribunal so it can resolve the dispute. Although the deadline is 42 working days they should aim to do this within 20 working days.
- If the documents are in electronic form HMRC may be prepared to accept copies.
More details are available at
http://www.hmrc.gov.uk/briefs/brief5409.htm
For further information please contact Iain Macleod on
