Tax Tribunal confirms documents sought by HMRC were legally privileged

11 May 2022

In Colin Wiseman v HMRC [2022] UKFTT 00075 (TC), the First-tier Tribunal (FTT) confirmed that certain documents which were requested by HMRC under paragraph 1, Schedule 36, Finance Act 2008, were subject to legal professional privilege (LPP) and should not be disclosed.


HMRC issued to Mr Colin Wiseman (the Applicant) a notice under paragraph 1,  Schedule 36, Finance Act 2008 (the Notice), requiring disclosure of certain documents in order to allow HMRC to check the Applicant's tax position for the tax year 2002/03.

The Applicant appealed against the Notice and notified HMRC of his belief that some of the documents required by HMRC were subject to LPP. Those documents related to communications between the Applicant and his solicitors.

HMRC did not accept that all the documents, in respect of which LPP was claimed, were privileged. It was of the view that timetables, flowcharts, step by step plans, accountancy advice and financial records would not normally be privileged, and that implementation advice would not be privileged simply by reason of being provided by a firm of solicitors.

The Applicant applied to the FTT, under Regulation 5 of the Information Notice: Resolution of Disputes as to Privileged Communications Regulations 2009 (SI 2009/1916), for a decision as to whether certain documents sought from him by the Notice were subject to LPP and as such should not be disclosed by virtue of paragraph 23, Schedule 36, Finance Act 2008.   

FTT decision

The application was allowed in part.

It was agreed that communications between lawyers, acting in their professional capacity, and their clients are privileged and that "acting in their professional capacity" means the provision of advice concerning rights and liabilities under private or public law and “what should prudently and sensibly be done in the relevant legal context” (per Taylor LJ in Balabel v Air India [1988] Ch 317).  It was also agreed that it is necessary to consider the context of the communication in question in order to understand whether the communication is part of the necessary exchange of information, what Taylor LJ described as the “continuum of communication and meetings between the solicitor and the client”.

The parties differed on whether it is necessary, when LPP is claimed, to consider the dominant purpose of the communication in order to determine whether a document is privileged. HMRC argued that such consideration is necessary. The Applicant disagreed.

Applying the decision of the Court of Appeal in CAA v R (oao Ltd) [2020] EWCA Civ 35, the FTT agreed with HMRC that, when considering whether legal advice privilege applies to a document, it is relevant to ask for what purpose or purposes the communication was made, and whether the dominant purpose was the giving or seeking of legal advice. However, the FTT noted that the CAA case concerned a dispute where the documents in issue were emails sent to multiple recipients, not all of whom were lawyers. Therefore, while the FTT considered that the question of whether the dominant purpose of a communication is to seek or receive legal advice can still arise when that communication is between only a lawyer and a client, the FTT considered that, in such circumstances, it was significantly less likely that such a communication would have a purpose other than the seeking or receiving of legal advice.

Applying the relevant legal principles to the twelve documents in dispute, the FTT directed that ten of the documents were privileged and should not be disclosed to HMRC. The FTT directed that the two remaining documents were to be disclosed to HMRC. With regard to these two documents, the FTT concluded that the dominant purpose of the communications at the meeting to which the documents related, was not the provision of legal advice and therefore the documents were not privileged from disclosure.


Under Schedule 36, Finance Act 2008, HMRC have wide-ranging powers to require the disclosure of documents from taxpayers and third parties. Although there are limited rights of appeal against these powers, the right of taxpayers to withhold documents from HMRC on the basis they are legally privileged represents an important check on these powers. This decision reinforces the position that communications between a lawyer and client will generally attract LPP.  It was confirmed by the Supreme Court in R (oao Prudential Plc) v Special Commissioner of Income Tax [2013] UKSC 1, that LPP does not apply to any professional other than a qualified lawyer. This may be a relevant consideration should a taxpayer (or third party) wish to have a candid and open discussion in correspondence with their adviser in the knowledge that they may withhold documents from HMRC on the basis that they attract LPP. 

The decision can be viewed here.

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