Adrian Finch v The Information Commissioner & Anor [2025] UKFTT 411 (GRC)

Case Reference: EA/2023/0454[2025] UKFTT 00411 (GRC)
First-tier Tribunal
General Regulatory Chamber
Date 9 April 2025
Information Rights
Decided without a hearing
Before
JUDGE STEPHEN ROPERMEMBER STEPHEN SHAWMEMBER EMMA YATES
Between
ADRIAN FINCHAppellantTHE INFORMATION COMMISSIONERRespondentHIS MAJESTY’S TREASURYRespondentDecision: The appeal is Allowed in partSubstituted Decision Notice:The Tribunal’s Decision Notice in case reference EA/2023/0454, set out below, is substituted for Information Commissioner’s Decision Notice reference IC-226473-M2G7, dated 27 September 2023, with regard to the request for information made to His Majesty’s Treasury by Adrian Finch dated 31 May 2022.Substituted Decision Notice
[1]His Majesty’s Treasury was entitled to rely on sections 31(1)(a), 31(1)(d) and 35(1)(a) of the Freedom of Information Act 2000 in respect of the information it withheld in reliance on those sections.[2]His Majesty’s Treasury was not entitled to rely on section 42(1) of the Freedom of Information Act 2000 in respect of the information it withheld in reliance on that section. His Majesty’s Treasury must disclose this information within 35 days of the promulgation of this decision, or (if there is an application to appeal this decision) within 28 days after being notified of an unsuccessful outcome to such application or any resulting appeal.[3]His Majesty’s Treasury was not entitled to rely on section 40(5B) or section 41(2) of the Freedom of Information Act 2000 to refuse to confirm or deny whether further information was held relating to the four meetings it identified in its correspondence to Adrian Finch dated 11 August 2023. If it has not already done so, His Majesty’s Treasury must fully comply with the steps specified by the Information Commissioner in paragraph 3 of his decision notice (reference IC-226473-M2G7). If applicable, those steps must be taken within 35 days of the promulgation of this decision, or (if there is an application to appeal this decision) within 28 days after being notified of an unsuccessful outcome to such application or any resulting appeal. The response given by HMT in respect of those steps (including any further disclosure of information by it), whether before or after the date of this decision, will be subject to the rights given under section 50 of the Freedom of Information Act 2000 to make a new complaint to the Information Commissioner.[4]His Majesty’s Treasury breached section 10 of the Freedom of Information Act 2000 and section 17 of the Freedom of Information Act 2000 by failing to identify all relevant information within the scope of that request or to issue a refusal notice within 20 working days respectively.[5]Failure to comply with this decision may result in the Tribunal making written certification of this fact pursuant to section 61 of the Freedom of Information Act 2000 and may be dealt with as a contempt of court. REASONS

Preliminary matters

[1]In this decision, we use the following terms to denote the meanings shown: Appellant: Adrian Finch. Commissioner: The Information Commissioner (the First Respondent). Decision Notice: The Decision Notice of the Commissioner dated 27 September 2023, reference IC-226473-M2G7, relating to the Request. Disclosed Information: The information which was disclosed by HMT on 12 June 2023 in response to the Request (as included in the open bundle in the appeal). Duty to Disclose: The duty of a public authority to communicate requested information which it holds, pursuant to section 1(1)(b) (set out in paragraph 27). FOIA: The Freedom of Information Act 2000. HMRC: His Majesty’s Revenue & Customs. HMT: His Majesty’s Treasury (the Second Respondent). Public Interest Test: The test, pursuant to section 2(2)(b) (set out in paragraph 30), as to whether, in all the circumstances of the case, the public interest in maintaining the exemption to the Duty to Disclose outweighs the public interest in disclosing the information. Request: The request for information made to HMT by the Appellant dated 31 May 2022, as set out in paragraph 7. Requested Information: The information which was requested by way of the Request.[2]Unless the context otherwise requires (or as otherwise expressly stated), references in this decision:a. to numbered paragraphs are references to paragraphs of this decision so numbered;b. to any section are references to the applicable section of FOIA.

Introduction

[3]This was an appeal against the Decision Notice, which (in summary) decided that HMT could rely on certain sections of FOIA to withhold some of the Requested Information, but could not rely on section 40(5B) or section 41(2) to refuse to confirm or deny whether further information was held within the scope of the Request. The Decision Notice also found that HMT breached section 10 and section 17 and it required HMT to take certain steps.[4]We considered whether it was necessary for us to provide a closed decision. We concluded that it would not be necessary, on the basis that the reasoning behind this decision can be sufficiently understood without us needing to refer to the specific details of, or disclose any sensitive aspects of, the material in the closed bundle.

Background to the Appeal

[5]The background to the appeal is as follows. It may be helpful to first provide some context of the Loan Charge Review which was the subject of the Request, as explained in the witness statement provided on behalf of HMT in respect of the appeal.[6]The Loan Charge was a policy announced by the Chancellor in the 2016 Budget to tackle disguised remuneration tax avoidance schemes. Following concerns that had been raised about the policy as a mechanism for drawing a line under those schemes, in September 2019 the Chancellor commissioned Sir Amyas Morse (now Lord Morse) to conduct an independent review of the Loan Charge. This is the ‘Loan Charge Review’ referred to in the Request.

The Request

[7]On 31 May 2022, the Appellant contacted HMT via the ‘whatdotheyknow’ website and requested information in the following terms: “Please disclose the minutes, and any other recorded information, of all Loan Charge Review meetings which were held on the dates below – 18th September 2019 2nd October 2019”.[8]Following a request for clarification from HMT, the complainant clarified the Request on 29 June 2022 as follows: “The Loan Charge Review was commissioned by the Chancellor of the Exchequer, who has overall responsibility for the work of Her Majesty's Treasury. Whether these were meetings held by Her Majesty's Treasury on the subject of the Loan Charge Review, or whether they were meetings held by one or more members of the Loan Charge Review team on either of those two dates is incidental. I have asked you to provide the minutes, and any other recorded information you hold, which relates to any of those meetings on the two dates mentioned. That recorded information will include printed documents, computer files, letters, emails, photographs, and sound or video recordings.”.[9]On 27 July 2022 and again on 24 August 2022, HMT told the Appellant that it had identified information within the scope of the Request, but sought more time to consider the Public Interest Test. On 14 September 2022, HMT asked the Appellant whether he had made the Request in his own name, as required under section 8(1)(b), or under a pseudonym. The Appellant then contacted the Commissioner, who verified his identity and informed HMT of this on 30 September 2022.[10]On 6 December 2022, HMT wrote to the Appellant saying that it had identified further information within the scope of the Request and that the burden of reviewing the information would be disproportionate, such that exemption in section 14(1) (vexatious requests) applied.[11]On 5 February 2023 the Appellant emailed HMT (again, via the whatdotheyknow website) to request an internal review. The Appellant objected to HMT’s reliance on section 14 and set out his concerns about how HMT had handled matters relating to the Request.[12]HMT responded on 12 June 2023. It acknowledged certain deficiencies regarding its handling of the Request HMT and stated that it no longer considered that section 14 was engaged in respect of the Request. It provided what it said was “the majority of the in-scope information” but stated that it had made some redactions pursuant to sections 21(1), 31(1)(a), 31(1)(d), 35(1)(a), 40(2) and 42.[13]On 11 August 2023 (as a result of the Commissioner’s investigation), HMT confirmed that meetings had taken place on the dates identified in the Request, but it refused to confirm or deny whether it held information within the scope of the Request relating to the “content of those meetings”, relying on section 41(2) and section 40(5B)(a)(i).

The Decision Notice

[14]In the Decision Notice, the Commissioner decided that:a. HMT was entitled to rely on the following sections to make redactions to the information it disclosed: section 31(1)(a) (prejudice to the prevention or detection of crime), section 31(1)(d) (prejudice to the assessment or collection of any tax or duty), section 35(1)(a) (information relating to the formulation or development of government policy) and section 42(1) (legal professional privilege);b. HMT was not entitled to rely on either section 40(5B) (personal information) or section 41(2) (information provided in confidence) to refuse to confirm or deny whether further information was held within the scope of the Request;c. HMT breached section 10 and section 17 by failing to identify all relevant information within the scope of the Request or to issue a refusal notice within 20 working days respectively.[15]The Decision Notice required HMT to take the following steps:a. to confirm or deny whether it holds information relating to the four meetings it identified in its correspondence to the Appellant dated 11 August 2023; andb. if that information is held, to either provide it or issue a refusal notice in accordance with section 17. The appeal The grounds of appeal

The appeal

[16]The Appellant’s grounds of appeal were focussed on the Commissioner’s findings in the Decision Notice that HMT was entitled withhold information pursuant to sections 31(1)(a), 31(1)(d), 35(1)(a) and 42(1). We address the material aspects of the Appellant’s arguments on these findings later below.[17]The Appellant did not challenge the Decision Notice’s findings that HMT was not entitled to rely on section 40(5B) or section 41(2) to refuse to confirm or deny whether further information was held within the scope of the Request. We comment separately on this point from paragraph 78 onwards.[18]The Appellant also did not challenge (in his complaint to the Commissioner) HMT’s reliance on sections 21(1) and 40(2) regarding certain redactions to the Disclosed Information.[19]Our decision therefore addresses the Commissioner’s findings in the Decision Notice in respect of sections 31(1)(a), 31(1)(d), 35(1)(a) and 42(1).

The Tribunal’s powers and role

[20]The powers of the Tribunal in determining the appeal are set out in section 58, as follows: “(1) If on an appeal under section 57 the Tribunal considers—(a) that the notice against which the appeal is brought is not in accordance with the law, or(b) to the extent that the notice involved an exercise of discretion by the Commissioner, that he ought to have exercised his discretion differently, the Tribunal shall allow the appeal or substitute such other notice as could have been served by the Commissioner; and in any other case the Tribunal shall dismiss the appeal. (2) On such an appeal, the Tribunal may Review any finding of fact on which the notice in question was based.”.[21]In summary, therefore, the Tribunal’s remit for the purposes of the appeal was to consider whether the Decision Notice was in accordance with the law. In reaching its decision, the Tribunal may review any findings of fact on which the Decision Notice was based and the Tribunal may come to a different decision regarding those facts. Essentially, the Tribunal is empowered to undertake a ‘full merits review’ of the appeal before it (so far as the Decision Notice is concerned).

Mode of hearing

[22]The parties consented to the appeal being determined by the Tribunal without an oral hearing.[23]The Tribunal considered that the appeal was suitable for determination on the papers in accordance with Rule 32 of the Tribunal Procedure (First-tier Tribunal) (General Regulatory Chamber) Rules 2009 and was satisfied that it was fair and just to conduct the appeal in this way.

The evidence and submissions

[24]The Tribunal read and took account of an open bundle of evidence and pleadings, as well as a closed bundle. The closed bundle contained the unredacted version of the Disclosed Information and some unredacted aspects of information which had been redacted in the open bundle. A separate written gist of the closed material had been provided by HMT following Case Management Directions from the Tribunal.[25]The open bundle included a witness statement on behalf of HMT. The witness's statement was given in their capacity as the Deputy Director for Personal Taxation in HMT. It is not necessary for us to identify this witness personally in this decision - therefore we merely refer to them as “the witness” and we mean no disrespect to them in doing so.[26]All of the contents of the above were taken into account, even if not directly referred to in this decision. The relevant statutory framework General principles

The relevant statutory framework

[27]Section 1(1) provides individuals with a general right of access to information held by public authorities. It provides: “Any person making a request for information to a public authority is entitled—(a) to be informed in writing by the public authority whether it holds information of the description specified in the request, and(b) if that is the case, to have that information communicated to him.”.[28]In essence, under section 1(1), a person who has requested information from a public authority is entitled to be informed in writing whether it holds that information. If the public authority does hold the requested information, that person is entitled to have that information communicated to them. However, those entitlements are subject to the other provisions of FOIA, including some exemptions and qualifications which may apply even if the requested information is held by the public authority. Section 1(2) provides: “Subsection (1) has effect subject to the following provisions of this section and to the provisions of sections 2, 9, 12 and 14.”.[29]Accordingly, section 1(1) does not provide an unconditional right to be told whether or not a public authority holds any information, nor an unconditional right of access to any information which a public authority does hold. The rights contained in that section are subject to certain other provisions of FOIA, including section 2.[30]Section 2(2) addresses potential exemptions to the Duty to Disclose. That section provides: “In respect of any information which is exempt information by virtue of any provision of Part II, section 1(1)(b) does not apply if or to the extent that—(a) the information is exempt information by virtue of a provision conferring absolute exemption, or(b) in all the circumstances of the case, the public interest in maintaining the exemption outweighs the public interest in disclosing the information.”.[31]The effect of the above is that some exemptions which are set out in Part II of FOIA are absolute and some are subject to the Public Interest Test. Section 2(3) explicitly lists which of those exemptions are absolute (and, pursuant to that section, no other exclusions are absolute). So far as relevant for the purposes of the appeal (see paragraph 19), sections 31, 35 and 42 are not included in that list.[32]Accordingly, in summary, the relevant exemptions to the Duty to Disclose in sections 31, 35 and 42 are subject to the Public Interest Test.

Section 31 – law enforcement

[33]So far as is relevant for the purposes of the appeal, section 31 provides:
“(1) Information which is not exempt information by virtue of section 30 is exempt information if its disclosure under this Act would, or would be likely to, prejudice— (a) the prevention or detection of crime, … (d) the assessment or collection of any tax or duty or of any imposition of a similar nature…”
.

Section 35 – formulation of government policy, etc

[34]So far as is relevant for the purposes of the appeal, section 35 provides:
“(1) Information held by a government department… is exempt information if it relates to— (a) the formulation or development of government policy…”
.

Section 42(1) – legal professional privilege

[35]So far as is relevant for the purposes of the appeal, section 42(1) provides:
“Information in respect of which a claim to legal professional privilege… could be maintained in legal proceedings is exempt information.”
.

Discussion and findings

[36]For convenience, we set out our comments below under sub-headings related to the relevant sections which were the subject of the appeal, after addressing some preliminary points.[37]We start by briefly mentioning section 30. This is relevant because it is precursor to the engagement of sections 31(1)(a) and 31(1)(d), in that those sections can only be engaged if section 30 is itself not engaged: as we have noted, section 31 refers to a potential exemption for information “which is not exempt information by virtue of section 30”.[38]There was no dispute between the parties regarding section 30 not being engaged. However, for completeness, we find that section 30 (investigations and proceedings conducted by public authorities) is not engaged in respect of any of the Disclosed Information or the unredacted information contained in the closed bundle. This is essentially because:(a) we concluded, based on our assessment of the relevant information, that it would not fall within section 30, which (in essence) is related to investigations relating to possible crimes, criminal proceedings or civil proceedings;(b) we also had no other evidence or submissions to support a conclusion that section 30 was engaged.[39]We refer below to certain information within the scope of the Request which was withheld by HMT. The redacted aspects of the Disclosed Information were redacted by reference to the section number and the withheld information (unredacted) was shown in the closed bundle using different coloured highlighting depending on the exemption being relied on by HMT. Some aspects of the closed bundle appeared to have possibly used more than one highlighted colour; in those instances we used the exemptions cited in the redactions in the open bundle as confirmation of the exemptions were being relied on by HMT (or as otherwise referred to by the witness, where they stated that the sections were incorrectly identified in the Disclosed Information).[40]We would also briefly comment, for the purposes of our discussions below, that the witness’s statement set out in more detail the nature and purpose of the relevant withheld information and that we considered each aspect of the withheld information in detail whilst assessing the relevant potential exemptions to the Duty to Disclose.

Section 31(1)(a) and the associated Public Interest Test

(a) and the associated Public Interest Test

[41]HMT explained that the information which was withheld under the exemption in section 31(1)(a) comprises hyperlinks to HMT’s (and HMRC’s) remote meeting software and storage locations on HMT’s electronic document records management system (Sharepoint), as well as dialling-in details for joining conference calls. This information (redacted in the Disclosed Information by reference to the section number) was shown in the closed bundle using grey coloured highlighting.[42]The Appellant argued in his grounds of appeal that no evidence had been provided to support the view that disclosure of the relevant information would engage section 31(1)(a). However, the statement from the witness explained that HMT’s concern was that this information could be exploited by cyber-attackers to conduct ‘spear phishing’ attacks by creating spoof hyperlinks based on those actually used by HMT (and HMRC). The witness statement also explained that:(a) phishing is where attackers send fraudulent emails or messages pretending to be a trusted source, in an attempt to manipulate a person into performing actions that compromise security; and(b) ‘spear phishing’ is a targeted form of phishing where threat actors tailor their messages to a specific individual or organisation. The witness went on to explain that HMT’s concern was informed by the advice from the National Cyber Security Centre which advises organisations to reduce the information made publicly available in order to decrease the opportunity for attackers to create such spoof hyperlinks.[43]The witness also gave evidence to the effect that:a. the disclosure of Sharepoint links, which contain details about HMT’s digital infrastructure, would provide threat actors with details that they could use to carry out speculative attacks against HMT’s infrastructure and would help them navigate its systems if they were successful in gaining access;b. publishing HMT’s internal tenant name would allow threat actors to identify its tenant ID and then use that to attempt to connect to HMT’s digital environment, use it in social engineering attacks on HMT users or via Microsoft (which hosts Sharepoint); andc. disclosing meeting links and dial-in details could also potentially enable access to meeting content, such as chat logs, presentations and recordings.[44]We accept the witness’s evidence and we find that the relevant information could be used for the purposes of cyber-crimes, were it to be disclosed. The Appellant argued that “it must be the case that the government's IT systems are protected by the most up-to-date cyber-security products, firewalls and other procedural or digital mechanisms” and accordingly that there was no ‘vulnerability’. However, we do not agree with that argument. For the reasons we have referred to, there would still be a vulnerability to attacks even if appropriate firewalls and similar protections were put in place, including with regard to the nature of phishing attacks which can target individuals and compromise security by way of actions taken by the individual. As the witness referred to, there would be more exposure to those risks if the relevant information were to be disclosed, as it would provide information on the nature of HMT’s use of digital technology and its system architecture.[45]We therefore find that section 31(1)(a) is engaged in respect of the relevant information on the basis that the disclosure of it would be likely to prejudice the prevention of crime – namely, measures to prevent cyber-crime relating to potential attacks on HMT’s systems.[46]In respect of the Public Interest Test, the Decision Notice recorded (in paragraph 25) the Commissioner’s view that disclosure of the relevant information would demonstrate that HMT is acting in an open and transparent manner. We therefore disagree with the Appellant’s view that (in essence) the Commissioner did not place any weight on the value of transparency. We have taken into account the public interest in transparency as a factor favouring disclosure but we consider that this is outweighed by the public interest in maintaining the exemption in section 31(1)(a). In essence, this is because we find there is a significant public interest in preventing HMT (and HMRC) from the risk of cyber-crime. This is not only because of the general principle of preventing crime but also because of the potential impact to the systems of HMT (and HMRC) should there be any phishing attack, not only from an operational perspective but also the potential for data loss.[47]In contrast, we find that there is negligible public interest in disclosing the relevant information. We consider that there is no real public interest in having disclosure of the hyperlinks to HMT’s (and HMRC’s) remote meeting software and storage locations or the dial-in details for joining conference calls. As the witness pointed out, HMT had already confirmed that meetings took place on the relevant dates, as well as the names of senior officials who were involved in those meetings and(save for some limited redactions) what was discussed. In our view, disclosure of the relevant information would therefore not add anything to further the public interest, especially when balanced against the risks in doing so.[48]For the above reasons, we agree with the findings in the Decision Notice that section 31(1)(a) is engaged in respect of the relevant information and that the public interest favours maintaining the exemption.

Section 31(1)(d) and the associated Public Interest Test

(d) and the associated Public Interest Test

[49]HMT explained that the information which was withheld under the exemption in section 31(1)(d) comprises analysis by and discussion among HMT officials about HMRC’s ability to detect disguised remuneration tax avoidance schemes and potential policy options (including their merits) for tacking such schemes. This information (redacted in the Disclosed Information by reference to the section number) was shown in the closed bundle using coloured highlighting referred to as ‘mauve’ by HMT (but as ‘pink’ by the Commissioner in his response to the appeal). The witness stated that some of the information withheld under section 31(1)(d) (namely, part of an extract from an HMRC paper entitled “Use of Disguised Remuneration avoidance schemes over time” and part of a letter sent by HMRC to Lord Morse dated 1 October 2019) was incorrectly identified in the Disclosed Information as being withheld under section 35(1)(d).[50]The witness explained that the relevant information was jointly created by HMRC and HMT as a ‘policy partnership’ for policy making, with HMT leading on strategic tax policy and policy development and HMRC leading on policy maintenance and implementation.[51]As the witness explained, the relevant information “reveals information about how HMRC detects and enforces against tax avoidance schemes and the potential difficulties HMRC would face in its enforcement efforts against them”. We find that the relevant information addressed potential policies to tackle tax avoidance schemes, including consideration of possible limitations or weaknesses associated with those policies, as well as descriptions of the characteristics of tax avoidance arrangements. It also covered mechanisms which HMRC is able to use to take a person’s financial situation into account when agreeing and settling any outstanding tax liabilities.[52]Given the contents of the relevant information, we find that if it were to be disclosed, it would be likely to be exploited by taxpayers or their advisors to develop arrangements, or to change or manipulate their affairs, in order to avoid or lessen their tax liability or to alter a settlement outcome with HMRC. We therefore find that disclosure of this information would be likely to prejudice the assessment or collection of tax and accordingly that section 31(1)(d) is engaged.[53]Turning to the Public Interest Test, the Decision Notice recorded HMT’s position that there is a “strong” public interest in the release of the withheld information, as it would demonstrate accountability for the implementation and enforcement of tax rules and could improve understanding of HMRC’s settlement procedures and provide greater transparency, including with regard to how taxpayers can settle their affairs. In terms of factors favouring maintaining the exemption, HMT’s position was that there is a “very strong” public interest in maximising the recovery of tax lawfully due and that disclosure of the relevant information could help taxpayers artificially reduce their liability to pay tax and therefore pay less tax than is fair and due. Moreover, HMT considered that providing an unfair advantage to potential tax avoiders and the promoters of tax avoidance schemes could also undermine public confidence in the tax system. Accordingly, HMT and the Commissioner asserted that, on balance, the Public Interest Test favoured maintaining the exemption in section 31(1)(d).[54]The Appellant’s position, in essence, was that the Public Interest Test favoured disclosure of the relevant information. The Appellant agreed with the principle that HMRC should be able to enforce the law properly so that the tax burden is shared equally and fairly. However, his view was that the tax burden was not being shared equally and fairly, particularly with regard to the implementation of the Loan Charge. The Appellant also considered that public confidence had already been lost as a result of the actions undertaken by HMT and HMRC regarding the Loan Charge and that there was a public interest in greater understanding of the Loan Charge. We also took into account the Appellant’s other arguments in favour of disclosure of the relevant information, including regarding the harm that the Loan Charge had on thousands of individuals and his allegations regarding the impropriety and failings of government with regard to the Loan Charge.[55]We accept that there is public interest in disclosure of the relevant information for the reasons referred to. We would also stress that we consider that there was a significant amount of material disclosed by way of the Disclosed Information, such that the public interest in transparency and understanding regarding the Loan Charge has already been achieved to some extent. However, taking all the factors into account, we find that the factors favouring disclosure are outweighed by the factors favouring maintaining the exemption in section 31(1)(d). In particular, we consider that there is greater public interest in withholding the information so as to avoid the risk of it being used to facilitate tax avoidance or to lessen the amount of tax which might otherwise lawfully be collected by HMRC. Whilst we acknowledge the Appellant’s allegations that HMRC was not acting lawfully in respect of the Loan Charge, there was no evidence to support that view.[56]For the above reasons, we agree with the findings in the Decision Notice that section 31(1)(d) is engaged in respect of the relevant information and that the public interest favours maintaining the exemption.

Section 35(1)(a) and the associated Public Interest Test

(a) and the associated Public Interest Test

[57]HMT explained that the information which was withheld under the exemption in section 35(1)(a) comprises:(a) part of an internal HMT email dated 1 October 2019 relating to “future strategy”;(b) part of an internal HMT email dated 2 October 2019; and(c) a paper entitled “Loan Charge Review: Options for Concessions”. This information (redacted in the Disclosed Information by reference to the section number) was shown in the closed bundle using red coloured highlighting. The witness stated that some of the information withheld under section 35(1)(a) (namely, elements (a) and (b) above) was incorrectly identified in the Disclosed Information as being withheld under section 31(1)(a).[58]The Appellant argued that section 35(1)(a) was not engaged in respect of the relevant information on the basis that the information does not relate to the development of policy, because the policy (the Loan Charge) had already been developed several years prior to the date of the Request. Accordingly, the Appellant considered that the ‘safe space’ argument had long passed.[59]The witness explained in their statement that:a. the policy options considered within the relevant information directly informed a consultation on proposed criminal sanctions for promoters of tax avoidance schemes;b. at the time of HMT’s original response to the Request (in June 2022), work was still ongoing for the development of those proposals;c. as amendments to the Loan Charge (enacted in response to Lord Morse’s recommendations in the Finance Act 2020) were complete, most of the information contained in the documents was disclosed, but the relevant information was withheld under section 35(1)(a) as the policy development work on options to tackle promoters of tax avoidance schemes remained live at the time.[60]We accept that evidence and we find that:a. the relevant information was held by a government department (HMT);b. the relevant information relates to the formulation or development of government policy (namely, government policy on tackling the promotion and use of disguised remuneration tax avoidance schemes), as the material describes and considers policies on tackling promotion and use of disguised remuneration tax avoidance schemes generally (not limited to the Loan Charge); andc. the activity relating to the formulation or development of government policy was still in progress at the time of the Request and HMT’s response to it in June 2022.[61]We therefore find that section 35(1)(a) is engaged in respect of the relevant information.[62]In respect of the Public Interest Test, the Appellant did not set out any specific arguments regarding the application of the Public Interest Test in respect of section 35(1)(a). However, we took into account for this section his arguments for the other sections regarding the public interest favouring disclosure, including the factors we referred to in paragraph 54, as well as his views regarding the inadequacy of the relevant measures in tackling any of the issues regarding the government policy in question.[63]The witness accepted that there was a general public interest in transparency and in understanding how HMRC enforces against tax avoidance. The Commissioner also considered there to be public interest in disclosure of the relevant information.[64]However, both the Commissioner and HMT argued that there is a greater public interest in withholding the relevant information so as to enable a safe space for the development of government policy. In particular, the Commissioner and HMT considered that analysis of relevant options needed to be considered without disclosure to the public, as disclosure might facilitate or enable tax avoidance.[65]We consider that there is a public interest in transparency regarding the Loan Charge and in understanding how HMRC enforces against tax avoidance generally and, as stated, we have taken into account the Appellant’s arguments regarding factors favouring disclosure. However, we find that there is a greater public interest in withholding the relevant information, given the risk of the information being used to avoid tax. In our view this is particularly pertinent having regard to the nature of the relevant information, which relates to how existing policies could be refined, as well as future tax avoidance prevention options and an analysis of the risks involved with each. We consider that it is clearly contrary to the public interest to disclose information revealing the advantages and disadvantages of the policy options, at a time that they are still being considered, which could be exploited by taxpayers or their advisors to avoid or reduce tax payments which would otherwise lawfully be due. Accordingly, taking all the factors into account, we find that the Public Interest Test favours maintaining the exemption in section 35(1)(a).[66]For the above reasons, we agree with the findings in the Decision Notice that section 35(1)(a) is engaged in respect of the relevant information and that the public interest favours maintaining the exemption.

Section 42(1)

[67]HMT explained that the information which was withheld under the exemption in section 42(1) comprises “most of the “legal” and in some cases the “legislation” sections of a paper titled “Loan Charge Review: Options for Concessions””. HMT stated that the information is legal advice from HMRC’s solicitors on the legal implications (including the need for legislation) of various policy options being considered as part of the government’s response to potential recommendations made by the Loan Charge Review. This information (redacted in the Disclosed Information by reference to the section number) was shown in the closed bundle using dark blue coloured highlighting (referred to as simply ‘blue’ by the Commissioner in his response to the appeal, but there were other redactions under section 41(1) which used light blue highlighting).[68]Legal professional privilege encompasses ‘legal advice privilege’ and ‘litigation privilege’. Legal advice privilege applies to confidential communications between a lawyer and their client for the dominant purpose of giving or receiving legal advice or assistance (whether the matter is contentious or non–contentious). Litigation privilege extends to protect a wider range of communications, covering confidential communications between clients and lawyers, or either of them and third parties, which are brought into existence with the dominant purpose of being used in litigation (including contemplated litigation).[69]This element of the appeal was therefore concerned with the potential application of legal advice privilege (rather than litigation privilege) for the purposes of section 42(1), as the relevant information does not relate to existing or prospective litigation.[70]Case law has established See Three Rivers District Council and others (Respondents) v. Governor and Company of the Bank of England (Appellants)[2004] UKHL 48 that the relevant principles which must apply if legal advice privilege attaches to any particular material are that the material:a. must be between a qualified lawyer acting in their professional capacity and a client;b. must be created with the sole or dominant purpose of obtaining or providing legal advice; andc. must be confidential.[71]HMT submitted that the relevant information was subject to legal professional privilege. However, we find that there was insufficient evidence to support that argument. The relevant material comprised part of the Disclosed Information (with the relevant information redacted in reliance on section 42(1)) and it covered matters such as the policy options we discussed above in respect of section 35(1)(a). Based on our assessment of the relevant material and the other evidence relating to it, we find that the document in question does not comprise communications between a lawyer and their client.[72]Also, as we have noted, HMT stated that the relevant information was advice from HMRC’s lawyers (not HMT’s lawyers), albeit circulated to personnel from both HMRC and HMT. The material in question had been circulated by email to a number of people within HMT and HMRC and although it was marked ‘official-senstive’ it was not expressly stated to be confidential. The material had been circulated to junior officials in addition to senior officials; this was evidenced by the witness in their statement and was reflected in the redactions made by HMT pursuant to section 40. These factors could mean that legal professional privilege (if it existed) was lost in respect of the relevant information, although we acknowledge the concept of ‘common interest privilege’ and we recognise the possibility that material which reveals the substance of a privileged communication can still be subject to legal professional privilege.[73]Our observations in the preceding paragraph are incidental, however. This is because, as we have stated, we find that there was insufficient evidence to support HMT’s assertion that the relevant information was subject to legal professional privilege. The witness statement included the witness’s view that the relevant information was “a summary of legal advice from HMRC solicitors” and they considered that “it is therefore confidential legal advice which is subject to legal advice privilege” but no evidence was provided in support of their views. In particular, there was no evidence as to the origin of the relevant information, including no evidence to demonstrate that the material satisfied the three limbs of the principles set out in paragraph 70.[74]Paragraph 64 of the Decision Notice correctly reflected the principles we outlined in paragraph 70 which must apply if legal advice privilege attaches to any particular material. However, in our view the Commissioner did not properly analyse whether the relevant information was in fact caught by the exemption. As we stated, the material itself does not comprise communications between a lawyer and their client. The Commissioner should have given further consideration as to whether the relevant information revealed the substance of a privileged communication such that legal professional privilege could still be asserted in respect of it.[75]The Commissioner stated in paragraph 67 of the Decision Notice that he was satisfied, having considered the relevant information, that it “does contain legal considerations and also contains advice on legal remedies to potential issues”. The Commissioner therefore concluded that the information was “subject to privilege”. However, material is not necessarily subject to legal advice privilege simply because it contains ‘legal considerations and advice’; the test for legal advice privilege would need to be met and (as we have stated) there was insufficient evidence to support the conclusion that the test was met. We therefore find that the Commissioner erred in concluding that the relevant information was legally privileged such that the exemption in section 42(1) was engaged.[76]For the above reasons, we find that section 42(1) was not engaged in respect of the relevant information and that the Commissioner erred in the Decision Notice in concluding that that section was engaged.[77]Given our finding that that section 42(1) was not engaged, it is not necessary for us to go on to consider the Public Interest Test.

Other points

[78]As we have noted, the Appellant did not challenge the Decision Notice’s findings that HMT was not entitled to rely on section 40(5B) or section 41(2) to refuse to confirm or deny whether further information was held within the scope of the Request. However, the Appellant stated that, as at the date on which he submitted the appeal, HMT had not taken the steps required by the Decision Notice (as referred to in paragraph 15), as the deadline for taking those steps had not expired at that point.[79]The Appellant was critical of the fact that the Decision Notice had granted HMT 35 calendar days to take those steps, given that his appeal against the Decision Notice had to be filed within 28 calendar days of the date on which the Decision Notice was sent to him.[80]However, section 50(6) states:
“Where a decision notice requires steps to be taken by the public authority within a specified period, the time specified in the notice must not expire before the end of the period within which an appeal can be brought against the notice…”
. The Commissioner was therefore right to ensure that the time period given in the Decision Notice for taking those steps elapsed after the time period for filing an appeal. There is, of course, a logic to this – in that if a decision notice is appealed (and it could be the public authority which appeals) it would defeat the purpose of the appeal to require the decision notice to be complied with pending determination of that appeal. Indeed, as section 50(6) goes on to state: “…if such an appeal is brought, no step which is affected by the appeal need be taken pending the determination or withdrawal of the appeal”.[81]HMT’s response to the appeal stated that HMT did issue a further response (on 1 November 2023) regarding the relevant further information. It stated that some of the information that was held was disclosed in an annex to that response with the remainder redacted in reliance on exemptions under sections 40(2) and 41(1)(b).[82]Any subsequent response of HMT is not the subject matter of the Decision Notice. Accordingly, it is outside of our jurisdiction to consider the adequacy of that response or the reactions which HMT stated were made to the further information which was disclosed as part of that response. This is because our jurisdiction is limited to the Decision Notice itself, as specified in paragraph 20 (and summarised in paragraph 21). However, it is open to the Appellant to make a further complaint to the Commissioner under section 50 regarding the further response provided by HMT.

Final conclusions

[83]For all of the reasons we have given, we find that:a. the Decision Notice was correct to conclude that HMT was entitled to rely on the exemptions in sections 31(1)(a), 31(1)(d) and 35(1)(a) in respect of the information it withheld in reliance on those sections and that the Public Interest Test favoured maintaining those exemptions;b. the Decision Notice involved an error of law in concluding that section 42(1) was engaged in respect of the information which was withheld in reliance on that section.[84]We thereforeallow the appeal, in respect of our finding regarding the engagement of section 42(1), and we make the Substituted Decision Notice as set out above.