HMRC has been found guilty of breaching a taxpayer’s confidentiality. After Ingenious Media failed to convince the Court of Appeal that HMRC had acted unlawfully when it had discussed a film investment scheme with journalists from the Times, the company has now won its appeal at the Supreme Court.
Ingenious Media had promoted film investment schemes that were designed to create partnerships that would enable the investors to take advantage of some tax exceptions and reliefs. HMRC considered the schemes to constitute tax avoidance on the grounds that the schemes were ineffective and that the wealthy individuals who used them were not entitled to the exceptions and reliefs claimed.
HMRC estimated that the schemes posed a £5 billion risk to revenue. HMRC also said that Ingenious Media had been aware of HMRC’s view of the schemes for over four years. HMRC had also challenged the validity of the schemes at a Tax Tribunal.
In 2012, HRMC was contacted by two journalists from the Times with a request for a background briefing about tax avoidance schemes. The journalists were given a 75-minute off-the-record interview on 14th June. Before the meeting, the Times had told HMRC that it had gathered a lot of information about tax avoidance schemes that could be valuable to the organisation. The journalists had also said that they wanted to discuss the film schemes.
At the meeting, the name of Ingenious Media Chief Executive Patrick McKenna was mentioned, and his name also appeared in two news articles that appeared in the Times identifying him as one of the main providers of the film schemes.