R (on the application of Emblin) v Commissioners for HM Revenue & Customs

Reference: [2018] EWHC 626 (Admin)

Court: Administrative Court, Queen's Bench Division

Judge: Whipple J

Date of judgment: 23 Mar 2018

Summary: Judicial Review -Breach of Confidence - Legal Professional Privilege - Suspected Tax Avoidance Schemes -  No Confidence in Iniquity - Inducement to Breach Confidence - Alternative Remedies - s.316B Finance Act 2004 (voluntary disclosure to HMRC not restricted by any duty of confidentiality) -  Data Protection Act 1998

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Appearances: Christina Michalos KC (Defendant) 

Instructing Solicitors: Solicitor for HMRC


The Claimants were a group of around 630 corporate & individual investors in two investment schemes (called Goldfinger & Volatility) promoted by company R. R  had engaged an independent financial advisor (IFA) to advise prospective investors in relation to the schemes. Unprompted & without R’s authorisation, the IFA contacted HMRC’s press office stating that he wished to report alleged tax avoidance arrangements of which he had detailed knowledge. The IFA went on to make disclosures to HMRC in three phases of details of the schemes including (i) lists of names & addresses of all investors; (ii) operation of the scheme; (iii) instructions to Counsel & two opinions of Counsel; and (iv) tax advice letters. R complained to HMRC that the information gathering by HMRC amounted to a breach of the Data Protection Act 1998 and inducement to breach confidence and legal professional privilege. HMRC investigated and concluded there was no breach or inducement as the IFA was a willing informant. The Claimants brought an application for judicial review alleging HMRC wrongly induced the IFA’s disclosures.


  1. Whether the Claimants were precluded from judicial review by reason of an alternative remedy.
  2. Whether HMRC had induced the IFA to breach confidence.
  3. Whether there was no confidence in the material because there was no confidence in iniquity & by analogy, no confidence in tax avoidance information which is contrary to the public interest.
  4. Whether HMRC had a statutory defence under s.316B Finance Act 2004 (voluntary disclosure to HMRC not restricted by any duty of confidentiality).
  5. Whether HMRC had induced the IFA to breach legal professional privilege (‘LPP’).
  6. Whether HMRC had induced the IFA to breach the Data Protection Act 1998.

Narrowing of Issues

Prior to the hearing:

(a) HMRC had agreed to return the instructions to and two opinions of Counsel. The live LPP issue concerned two tax advice letters from (a) a firm of accountants and (b) a firm of tax advisors which the Claimants contended contained and repeated advice of Counsel; and

(b) The Claimants accepted that alternative remedies existed for the alleged inducement to breach the Data Protection Act (DPA) under s.14 of that statute and this ground was not pursued by way of judicial review.



Finding for HMRC and dismissing the claim for judicial review:

  1. The claim was not precluded by reason of alternative remedies. The alternatives relied on by HMRC (appeal to First Tier Tribunal, complaint to Independent Adjudicators Office and private law tort claims) did not enable the Cs to obtain the relief they sought (prohibition on use of  & return of confidential information).
  2. Accepting HMRC’s submissions that inducement to breach confidence required some act of persuasion or enticement  – there was a distinction between active persuasion/enticement and mere provision of information.
  3. The IFA had made disclosure as a willing volunteer and continued to engage with HMRC providing information even after it was made clear to him that no ‘deals’ in respect of his own tax affairs was possible. There was no inducement.
  4. There was an obvious public interest in HMRC being put in a position when it could combat tax avoidance. However, in the present case the matter of tax avoidance was under investigation & iniquity had not yet been established.
  5. HMRC was entitled to rely on the statutory defence in s.316B, Finance Act 2004 which provides that no duty of confidentiality prevents voluntary disclosure to HMRC of information in respect of which there are reasonable grounds to suspect will assist HMRC in determining whether there has been a breach of the anti-tax avoidance legislation.
  6. The tax advice letters were not covered by LPP. Applying R (Prudential plc) v Special Commissioners of Income Tax [2013] UKSC 1 , the letters were not simply a means of communicating legal advice to clients, rather they were letters from tax advisors seeking to ‘sell’ the schemes to clients.


An unusual claim for judicial review brought by a large number of Claimants (over 630) dealing with wide ranging allegations of inducement to breach confidence, inducement to breach legal professional privilege & inducement to breach the Data Protection Act 1998. The latter was not pursued at the judicial review hearing as it was accepted there were alternative remedies.

The decision is of note for (a) the analysis of the law of inducement of breach of confidence at [35] -[44]; (b) the acceptance that, in principle, information concerning the combating of tax avoidance may fall within the maxim no confidence in iniquity (although deciding on these facts that the information here did not as tax avoidance was still being investigated) and (c) the application of the statutory defence to a claim for inducing breach of confidence in s.316B, Finance Act 2004.