“5. This case is concerned with arrangements that HMRC characterise as "Disguised Remuneration" ("DR") schemes, by which an individual receives a reward for the work he performs for another (or services he provides to another) in the form of (i) a modest salary (if employed) or fee (if self-employed) which is much lower than what he would be entitled to be paid or to charge for the work or services, plus (ii) a loan which in effect makes up the difference in terms of remuneration. To take a simple example, he carries out work for which he might have charged£50,000 , in return for a£10,000 salary or fee and a loan of£40,000 . He is better off than he would have been if he took a salary or a fee of£50,000 for doing the same work, because the loan is supposedly free of any liability to tax or NIC. Moreover, if the salary or fee is kept low enough, he may not have to pay income tax at a higher rate. In many DR schemes, the loan represents by far the greater part of the financial compensation received by the individual in exchange for the work done or services rendered. 6. The loans are often made by trustees of Employee Benefit Trusts ("EBTs") rather than directly by the employer or customer, although the latter will be the source of the funds. In other cases, the loan may be made initially by the employer or customer and then assigned to the trustees of an EBT. The fact that the trustees of the EBT are, or become, the creditor, decreases the likelihood of the loan being called in, as the whole rationale of an EBT is to benefit past, present and future employees. 7. Whilst the salary (or the net profits in the hands of the self-employed contractor) will be liable to income tax and NIC, on the face of it the loan is not income, but rather, a transaction that gives rise to an indebtedness and a liability to repay. In balance-sheet terms the value of the "asset" in the form of the money received under the loan, is balanced against the corresponding liability. Neither item would usually appear in the profit and loss account of a self-employed individual, though the cost of borrowing (e.g. from a bank) might form a deductible expense. In practice, however, the creditor does not enforce the liability for many years, if at all - and is not expected to. The individual is free to spend the money as if it were his income, and rarely makes provision for its repayment. As a matter of economic reality, the loan is part of the reward he gets in return for his work or services, often the major part. 8. The position adopted by the Claimants (and by the promoters of such schemes) is that the loan does not attract a liability to income tax unless and until it is written off, at which point it can be characterised as a benefit. However, it could theoretically remain outstanding indefinitely, even after the death of the employee or trader, without attracting any liability to tax, at least on the capital element. 9. A large number of DR schemes exist, with many different permutations. Many have not been disclosed to HMRC under the disclosure of tax avoidance schemes legislation introduced in 2004 ("DOTAS"). Sometimes the trustees of the EBT are based offshore, making it harder for HMRC to obtain information from them. HMRC's position is, and has been for many years, that these arrangements are ineffective tax-avoidance schemes. The first witness statement of Mr Philip Gilbert, who was at all material times a member of HMRC's counter avoidance directorate, explains how HMRC's views were made known to the general public and to users of such schemes. Cockerill J describes in her judgment in Cartreft at [75]-[86] HMRC's "Spotlight" publications, going back to Spotlights 5 and 6 in November 2009, and other announcements and publications which made clear HMRC's intention to challenge arrangements where moneys which are a reward for the labour of an individual are diverted through some other form (including loans) without payment of PAYE or NIC. 10. Whilst HMRC have mounted successful challenges to certain DR schemes, and legislation was introduced which expressly imposed a liability to tax in respect of certain types of prospective arrangement, it was clear by the time of the 2016 Budget (when the introduction of the Loan Charge was announced) that there was still a proliferation of such schemes, and that the promoters of certain schemes were claiming that the targeted legislation was ineffective. Mr Gilbert explains the difficulties faced by HMRC in seeking to identify such schemes and their users in order to be able to challenge them effectively. The evidence of Ms Jacqueline McGeehan, the Deputy Director of Income Tax Policy at HMRC, is that the Government introduced the Loan Charges as a way to draw a line under this form of avoidance and ensure that tax was paid by scheme users, to be fair to the wider taxpaying population.”
“1. The total number of documents and the total number of emails for, or related to, the single meeting (6th June 2019 : Keith Gordon) which were identified at the time of the first refusal following (and despite) the narrowing of the original request by 70%. 2. The total number of documents and the total number of emails for, or related to, the single meeting (6th June 2019 : Keith Gordon) which were identified at the time of the next refusal, following (and despite) the further narrowing of this request. This might/could be the exact same answer as (1). 3. The total number of documents and the total number of emails for, or related to, the single meeting (6th June 2019 : Keith Gordon) which belatedly 'came to light' and which prompted you to claim a hitherto unmentioned use of section 14. 4. All recorded information and documentation which provides evidence as to why and how these 'newly discovered' documents/emails were not originally located or recognised as relevant, and what specific internal process, procedure or policy caused the failure to identify these at the time of the original request, or indeed any earlier than was eventually communicated by HM Treasury. 5. All metadata relating to FOI2021/20755, FOI2021/23104, FOI2021/27539, and IR2022/00365, which must include (but is not limited to) all recorded communications of any type, in any form (including smartphone exchanges), which provides evidence of internal discussions within HM Treasury, and any decisions which were taken with regard to these three distinct Freedom of Information requests and the associated internal review. It is considered that this much-narrowed scope, now focusing on ONE single meeting (6th June 2019 : [named individual]) will enable HM Treasury to supply this information without further delay.”
“Following a search of our records we can confirm that HM Treasury does hold information within scope of your request. However, your request is very wide in scope, comprising of a request for counts of emails/documents and for the meta data relating to three FOI requests and one internal review request. Our search has identified a large number of documents to consider. In order to comply with your request we would need to review each document separately with a view to determining whether any information was exempt from release, for example, due to sensitivities or personal data, and to then redact any exempt material. The effort required to review, assess and extract that information would be considerable and would require a disproportionate level of staff effort. We therefore consider that the request engages section 14(1) of the Freedom of Information Act due to the disproportionate effort that would be required to comply with the request. It may be that if you were to amend your request, for example, by narrowing the focus and being more specific about the type of information that you are particularly interested in we may be able to comply with a future request. However, we cannot guarantee that this would be the case.”
“For the avoidance of doubt, the element of your request which deems it burdensome is: “All metadata relating to FOI2021/20755, FOI2021/23104, FOI2021/27539, and IR2022/00365, which must include (but is not limited to) all recorded communications of any type, in any form (including smartphone exchanges), which provides evidence of internal discussions within HM Treasury, and any decisions which were taken with regard to these three distinct Freedom of Information requests and the associated internal review.”
“In my judgment the Upper Tribunal was right not to attempt to provide any comprehensive or exhaustive definition. It would be better to allow the meaning of the phrase to be winnowed out in cases that arise. However, for my own part, in the context of FOIA, I consider that the emphasis should be on an objective standard and that the starting point is that vexatiousness primarily involves making a request which has no reasonable foundation, that is, no reasonable foundation for thinking that the information sought would be of value to the requester or to the public or any section of the public. Parliament has chosen a strong word which therefore means that the hurdle of satisfying it is a high one, and that is consistent with the constitutional nature of the right. The decision maker should consider all the relevant circumstances in order to reach a balanced conclusion as to whether a request is vexatious. If it happens that a relevant motive can be discerned with a sufficient degree of assurance, it may be evidence from which vexatiousness can be inferred. If a requester pursues his rights against an authority out of vengeance for some other decision of its, it may be said that his actions were improperly motivated but it may also be that his request was without any reasonable foundation. But this could not be said, however vengeful the requester, if the request was aimed at the disclosure of important information which ought to be made publicly available...”
“The Freedom of Information Act 2000 … introduced a new regime governing the disclosure of information held by public authorities. It created a prima facie right to the disclosure of all such information, save in so far as that right was qualified by the terms of the Act or the information in question was exempt. The qualifications and exemptions embody a careful balance between the public interest considerations militating for and against disclosure. The Act contains an administrative framework for striking that balance in cases where it is not determined by the Act itself. The whole scheme operates under judicial supervision, through a system of statutory appeals.”