When a disputed tax case goes to tribunal the two sides submit skeleton arguments setting out the reasoning on their case, the respondents also submit a statement of case. These can be helpful in agreeing certain matters before the tribunal sits and allowing participants to deal with the other side’s arguments. When a tribunal case is published these arguments are not included, so matters which were agreed privately and arguments the lawyers chose not to use at tribunal are never seen.
Under these circumstances these papers may include matters which would be of great interest to other taxpayers with similar issues.
A recent tribunal has ruled that third parties are entitled to access these arguments if they have a legitimate interest in them, such as a similar case, or journalistic interest.
Interestingly both parties in the case opposed access for third parties, but access was allowed under the principles of open justice. It is still open for any party named in the documents to request a non-disclosure order, but they would need a valid reason for this, such a potential harm to them or their business.
There was also an appeal in relation to this case. This was settled confidentially by agreement; the HMRC statement of case for the appeal was not made available to third parties as there had been no public hearing setting up a situation requiring open justice.
This ruling has several consequences. Firstly, it gives advisers another tool to allow them to understand HMRC’s approach to an issue and to spot where HMRC are using contradictory arguments in different cases to maximise tax collected.
It increases the risk that where there is a fear that loss at tribunal would create an unwelcome precedent HMRC may be more likely to choose to settle to retain confidentiality.
It also means that advisers may want to think about an extra issue when putting together a skeleton argument as there may be matters one is willing to provide to HMRC, in confidence, which one would not wish another to access via a claim under these rules.
We are in favour of anything which increases access to information on tax and feel that access to skeleton arguments and statements of case can only enhance taxpayers' access to equal justice. This tribunal ruling is an important and welcome step in open justice.