Michael Paulin was successful in submissions on behalf of an international corporate in relation to an application by HMRC pursuant to paragraph 3 Schedule 36 the Finance Act 2008, on the basis of which HMRC sought the Tribunal’s approval of a third party information notice seeking disclosure of an auditor’s confidential working papers.

The Tribunal held that the prohibition on disclosure by paragraph 24 of information held in connection with the performance of the person’s functions as an auditor could not be displaced by the reference to “tax accountant” in paragraph 26. The fact that the auditors in question may also be the taxpayer’s accountants does not displace the prohibition under paragraph 24. In so ruling, Judge Jonathan Richards also held that:

“In their first application to the Tribunal (which was heard by me on 13 April 2018), HMRC made no mention at all of the provisions of paragraph 24 or paragraph 26 of Schedule 36 (which provide exclusions from auditors’ obligations to deliver documents). That was unsatisfactory. HMRC were clearly aware of these provisions and indeed confirmed to me that there had been some discussion within HMRC about those provisions before the application to the Tribunal was made. When HMRC make a “without notice” application such as this, they have a duty of candour to the Tribunal and should point out all relevant factors including factors that might incline the Tribunal not to approve the notice.” 

The Tribunal’s judgment can be read here.