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HM Revenue and Customs Brief 54/09


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Issued 18 August 2009

Regulations to resolve disputes about whether documents are covered by legal professional privilege

HM Revenue and Customs (HMRC) has published new regulations about whether information it has requested can be withheld due to legal professional privilege.

The regulations are in SI 2009 - 1916: (PDF 50K)(Opens new window) The Information Notice: Resolution of Disputes as to Privileged Communications Regulations 2009, which became effective on 7 August 2009.

They apply where HMRC has given an information notice to a person and there is a dispute about whether the requested document can be withheld due to legal professional privilege. The aim is to provide a clear method to resolve these disputes.

HMRC will amend technical guidance and add new operational guidance to the Compliance Handbook in September 2009.

Meanwhile this Business Brief aims to give an overview of the new system.


The new compliance checks legislation is one of the first pieces of cross cutting legislation designed to make the tax system simpler and more consistent.

From 1 April 2009, under Schedule 36 of the 2008 Finance Act, HMRC has one set of powers covering Capital Gains Tax, Corporation Tax, the Construction Industry Scheme, Income Tax, PAYE and VAT to:

  • visit business premises to inspect the premises, assets and records
  • ask taxpayers and third parties for information and documents

One restriction of these powers is that an HMRC officer cannot require a person

  • to provide privileged information
  • to produce the privileged part of a document

Information is privileged if a claim to legal professional privilege or, in Scotland confidentiality of communications, could be maintained in legal proceedings.

This is a complex area of the law but, broadly speaking, privilege attaches to:

  • documents containing confidential communications between lawyer and client for the purpose of obtaining or giving legal advice
  • documents produced for the purpose of contemplated or actual litigation

Information notice sent in correspondence

If an HMRC officer asks an unrepresented person for documents where legal professional privilege may be an issue, they should explain what documents may be protected by privilege.

The person or anyone acting on their behalf shall specify in a list each disputed document or type of document so they can be identified. They should send the list to HMRC by the deadline given in the information notice.

The officer should check the list and identify

  • items they accept are privileged
  • documents they do not need to see
  • documents that they still need to see

The officer then needs to contact Central Policy or the HMRC Solicitor for advice about items they still need to see. If Central Policy or the HMRC Solicitor agrees some of these documents are not covered by privilege the officer must then contact the person and:

  • explain why they think the document is not privileged
  • tell the person they must send the document unless they disagree with HMRC’s view
  • tell them what they need to do if they want the Tribunal to decide whether the document is subject to legal professional privilege

The person must make an application to the Tribunal within 20 working days of the date of the HMRC letter.

Information notice given at a visit

It will be unusual for an officer to give an information notice at a visit. They should only do so if it is reasonable and proportionate, and to address an identified risk.

If the person has an adviser the officer should give them the opportunity to contact them. If the person is unrepresented, and privilege may be an issue, the officer should explain what documents may be protected by legal professional privilege.

If there are disputed documents the person should place them in a container that prevents the documents being seen. They will then seal, label and sign the container. The officer will countersign and take custody of the container.

The officer must ensure that container, with its seal intact, reaches the Tribunal so it can resolve the dispute. Although the deadline is 42 working days they should aim to do this within 20 working days.

If the documents are in electronic form the officer may be prepared to accept copies – see CH23360.


HMRC is grateful for the assistance it has had from the Law Society of England and Wales, and the Chartered Institute of Taxation. We will incorporate much of their feedback into the operational guidance.

About the Author

© Crown Copyright 2009.

A licence is need to reproduce this article and has been republished for educational / informational purposes only. Article reproduced by permission of HM Revenue & Customs under the terms of a Click-Use Licence. Tax briefs are updated regularly and may be out of date at time of reading.

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Article Published/Sorted/Amended on Scopulus 2009-08-26 15:56:50 in Tax Articles

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