A mysterious case of hidden identityby
In an unusual tax tribunal case, the respondent is referred to only as “The Taxpayer”. Philip Fisher muses on the reasons behind this cloak of mystery.
The recent case report of the Commissioners for His Majesty’s Revenue and Customs vs The Taxpayer  UKUT 00012 (TCC) highlights one of the more unusual tax cases. So far it has spent over two years in reaching a second visit to the upper tribunal (UT) last November.
It must be said that situation will be close to unique and is therefore more interesting as a source of speculation than a means to learn many lessons for the future. It rests on the reason why the respondent in the case is referred to as “The Taxpayer”. That is because the anonymous individual is so keen to avoid any publicity regarding “tax arrangements” that HMRC believes were ineffective.
From the very limited information available, it is impossible identify the individual. What we do know is that he is male, must be rich and is presumably famous – otherwise why bother?
It seems reasonable to assume that he comes from one of a relatively limited class of personalities – most likely in sport, entertainment or politics – although it is always possible that he is an aristocrat.
The oddity here is that so many really famous people have found themselves involved in high-profile allegations of tax avoidance or fraud without managing (or perhaps trying) to keep their names out of the papers.
Without doing too much research, I can immediately come up with politicians such as Donald Trump, Nadhim Zahawi and Lord Sugar who have been in the news of late (not to mention a politician’s son, Hunter Biden) at this very moment.
On the sporting front, Boris Becker, Lionel Messi and David Beckham have all received publicity that they could have done without, while artistes such as Shakira, Jimmy Carr and Gary Barlow also hit the headlines for the wrong reasons.
It is intriguing to speculate on the people most likely to worry about finding their name in the news. Imagine if this were a senior Labour politician currently striving for election in a ministerial role. Similarly, senior members of the current government would hate to be associated with even more sleaze, especially as there is a distinct possibility that their defence might rely on the terms of the much-maligned European Convention on Human Rights.
Covering the basics
The case itself is highly technical but the basics are clear.
The Taxpayer appealed to the first tier tribunal (FTT) in September 2021 after HMRC denied him income tax deductions in relation to “arrangements”. These were the subject of two other lead cases (the lead appeals), which can be attempted to hide behind. HMRC opposed the application.
He requested that the appeal and any hearings be heard in private, his anonymity maintained throughout, daily reporting restrictions imposed and any publication of information limited so that he could not be identified.
FTT accepted the contentions but HMRC appealed to the UT on the basis that that decision was incorrect in law.
The UT agreed citing, inter alia, Lord Reed in A vs British Broadcasting Corporation (Scotland)  UKSC 25. He had opined: “It is a general principle of our constitutional law that justice is administered by the courts in public, and is therefore open to public scrutiny.”
This followed an earlier decision in Scott vs Scott  AC 417, where “outside three exceptional areas of wardship, lunacy and trade secrets …, the House of Lords emphasised the paramountcy of open justice”.
In making their decision, the judges said: “Where a taxpayer brings a tax appeal, the principle of open justice will inevitably result in some intrusion into the taxpayer’s privacy. However, that is a necessary price in most cases.”
It is also useful to note that the judges firmly rejected a submission that the principle of open justice applies with less force in the tribunals than in the courts.
The decision was ultimately very clear. “In conclusion, if one steps back it is clear that something has gone awry as a result of the FTT’s directions. The Taxpayer has obtained the benefit of privacy for all preliminary proceedings, without having produced any evidence of harm or prejudice, for an open-ended period, in a situation where, should he decide to withdraw or settle his appeal and not pursue the privacy and anonymity application, that benefit would not be reversible. That position cannot rationally be justified solely by reference to Direction 4 [of the FTT decision]. Nor is it an outcome which should be open to taxpayers, since it results in a blanket derogation from open justice by the backdoor.”
The appeal by HMRC having been allowed, this decision will initially remain anonymised. Thereafter:
- the decision will remain in anonymised form if permission to appeal the decision is granted, but
- if there is no appeal or permission to appeal was refused, or the onward appeal(s) (if any) are finally determined against the Taxpayer, then the decision will be republished in unanonymised form two weeks after the relevant decision, subject to any further application.
In other words, unless The Taxpayer’s appeal is successful, we will find out his identity and determine the reasons for his desire to remain anonymous in the fullness of time.