UT/2024/000066 - [2025] UKUT 00065 (TCC)

The first set of disclosure sought concerns documents which broadly go to the drafting and formulation of guidance set out in an HMRC “Operational Note”, a version of which is exhibited to Ms Flecher’s witness statement namely:

“Documents that demonstrate how the operational note relied upon by Samantha Fletcher (to determine whether reasonable disclosure was made in relation to section 20(5) Finance Act 2020) was drafted, including but not limited to:

i.

correspondence around the decisions to include certain examples in the operational note (i.e. why a certain piece of information was needed for it to be clear a reasonable disclosure could be made);

ii.

earlier drafts and comments on those drafts (given the document exhibited to Samantha Fletcher’s witness statement at SF1/40 contains tracked changes, we would expect correspondence in deliberation of the operational note and iterations of the Operation Note itself to exist); and

iii.

correspondence of/between any policy team or any other relevant person regarding the content of the operational note.”

The claimant points to multiple references in Ms Fletcher’s witness statement which show she applied the content of the Operational Note to determine whether the claimant had made reasonable disclosure. It goes on to submit however that no explanation as to the reasoning underpinning the approach adopted in the Operational Note and/or the reasons for the particular gloss which HMRC sought to apply to the legislative wording has been provided. It is submitted this is necessary to understand extent to which the policy Ms Fletcher applied was compliant with s20 FA 2020. As regards the approach to be taken to the question of whether HMRC had misdirected itself in law, the claimant highlights the approach the Upper Tribunal had indicated should be taken in a procedural application which had concerned the similar misdirection of law ground raised the Fluid claimants (published with reference [2024] UKUT 00322 (TCC)). In that decision the Upper Tribunal rejected HMRC’s argument to the effect that ground only concerned the correct legal interpretation of the relevant legislative provision and that there was no need to resolve what test the decision maker had in fact applied.

For the reasons regarding the irrelevance of the documents sought ,which HMRC explain in their response. I disagree however that the documents sought are necessary for the fair and just resolution of the issues in the case.

I can see how the Operational Note itself (which, as mentioned already, appears as an exhibit to Ms Fletcher’s statement), being a note that was relied on by Ms Fletcher in making her decision, is relevant to determining what test Ms Fletcher applied. Insofar as it is, it may then be relevant to consider the extent to which that Operational Note correctly reflected whatever the Upper Tribunal subsequently determines to be the correct interpretation of the relevant legal test.

By contrast, the documents sought explaining how the Operational Note was drafted will be irrelevant. There is nothing in the witness statement indicating these extraneous materials had any impact on Ms Fletcher’s decision making. So, the documents would not be relevant to the question of what actual test she applied. Nor will such documents be relevant to the other aspect entailed in a misdirection allegation of establishing the correct legal interpretation of the relevant statutory provision. (Even the Operational Note, being guidance reflecting HMRC’s views would not be relevant to the determination of what that correct legal test is).

Contrary to the claimant’s application (at [18]) it does not therefore follow from Ms Fletcher’s evidence (that she applied the Operational Note) that material relevant to the creation of the Operational Note is necessary to understand whether HMRC misdirected itself in law in the decision. Nor does it follow that it is necessary for that information to the disclosed to consider whether HMRC acted unreasonably or irrationally in the sense argued for in the claimant’s Ground 2. (As formulated this does not appear to concern the unreasonableness or irrationality in terms of HMRC’s decision making process but argues that on the basis of the relevant individual’s tax return information, HMRC’s conclusion that none of the statutory conditions were met, read in the light of the statutory definition, was a decision no reasonable authority could have come to).