All correspondence between HMRC and companies belonging to the Knox Group relating to DR arrangements and/or the Loan Charge and/or POTAS

The request was refused by HM Revenue and Customs.

Dear HM Revenue and Customs,

Please provide ALL correspondence including emails, letters, meetings , transcripts of phone call recordings etc. between HMRC and the Knox Group of Companies (including, but not limited to, Knox House Trust, Knox Private Office, Knox House Trustees Ltd, Carnegie Knox Ltd, Carnegie Knox Ltd (Scotland), Lancaster Knox LLP, Lancaster Knox Consulting Ltd, Knox Capital Solutions UK Ltd, AML Tax (UK) Ltd, AML Financial Executive Ltd, SmartPay Accounting Services Ltd etc.) which relates to Disguised Remuneration arrangements and/or the Loan Charge and/or any reference to the POTAS (Promoters of Tax Avoidance Schemes) legislation.

Yours faithfully,

Adam Bridgen

no-reply@hmrc.ecase.gsi.gov.uk on behalf of FOI Central Team, HM Revenue and Customs

Our ref: FOI2020/01795

Dear Mr Bridgen,

Freedom of Information Act 2000 Acknowledgement

Thank you for your communication of 1st October which has been passed to
HMRC's Freedom of Information Team.

We have allocated the above reference which you should quote if you need
to contact us.

The Team will arrange for a reply to be sent to you which will either
comply with HMRC's obligations under Freedom of Information Act or, if we
think it's an enquiry that we don't need to address under the terms of the
Act, let you know why. If it is the latter we will, if possible, pass it
on to a more appropriate part of the Department for answer.

As you will appreciate, the coronavirus pandemic has provided
unprecedented challenges for Government Departments including HMRC. Over
the coming weeks our priorities are to provide critical existing and new
Public Services for Government to support customers during this difficult
time. As a result, resources may be diverted away from usual compliance or
information rights work. HMRC aims to respond to all FOIA Requests within
20 working days. If for whatever reason this timescale cannot be complied
with HMRC will, where possible, write to you explaining the reason for the
delay and providing an estimated time for response.

Yours sincerely

HMRC Freedom of Information Act Team

no-reply@hmrc.ecase.gsi.gov.uk on behalf of FOI Central Team, HM Revenue and Customs

1 Attachment

Dear Mr Bridgen

We are writing in response to your request for information, received on 1
October 2020.

Yours sincerely,

HMRC Freedom of Information Team

Dear HM Revenue and Customs,

Please pass this on to the person who conducts Freedom of Information reviews.

Thank you for your reply dated 21 October.

In response, I disagree with your initial analysis of my request and do not therefore accept that this information is exempt from disclosure. I refer you to a previous FOI request (FOI2020 00053) made on 12 January 2020, which asked for 'All correspondence between Sir Amyas Morse and HMRC on the Loan Charge Independent review'. Following further prompts from the requestor in relation to the inherent delays in relation to the inquiry, this was provided (one presumes, in full) by HMRC on 24 April 2020. A similar request (FOI2020 00559) was also made to HM Treasury on the same date, who provided their own final response on 23 April 2020.

All information contained in the available files which were provided (by both HMRC and HMT) had been carefully redacted, enabling the information to be communicated out to the public domain without breaching any clauses relating to the identification of individuals. Based on this clear precedent, I see no reason for you to withhold this information and claim any perceived exemptions if the request can be met by ensuring the same level of redaction (to avoid identification of any individual(s)) is accordingly applied.

You reference various elements of the FOIA within your refusal to disclose. Firstly, Section 44(2) - the duty to confirm or deny does not arise if the confirmation or denial that would have to be given to comply with section 1(1)(a) would (apart from this Act) fall within any of paragraphs (a) to (c) of subsection (1). You state that the relevant legislation used in this particular instance is the Commissioners for Revenue and Customs Act 2005 (CRCA), specifically Section 23(1) - Revenue and customs information relating to a person, the disclosure of which is prohibited by section 18(1), is exempt information by virtue of section 44(1)(a) of the Freedom of Information Act 2000 (c. 36) (prohibitions on disclosure) if its disclosure —
(a)would specify the identity of the person to whom the information relates, or
(b)would enable the identity of such a person to be deduced

As outlined previously, the disclosure of this information would not breach any of the above clauses should it contain only data where ALL references to any relevant individuals were duly redacted. You also refer to CRCA explanatory note 110 - Subsection (1) makes it an offence for any person to contravene the non-disclosure provisions of section 18(1), or of section 20(9), in relation to “revenue and customs information relating to a person” whose identity is revealed by the disclosure. The term “person” includes both natural and legal persons, and, for example, the tax affairs of a limited company are also protected by the provisions of the subsection.

This suggests that you might have misinterpreted my request - I am not asking for information relating to the TAX affairs of any of the companies listed. I am requesting information regarding HMRC's communications to any of the listed companies (or their extended associates) with regard to legislative requirements, specifically the retrospective LC legislation introduced in the Finance (No.2) Act 2017 and also the POTAS legislation introduced in 2014, alongside communications which include the impact of these laws on this group of companies' well-known and publicly available provision of certain payroll arrangements.

You close by repeating your statement that Section 23(1) of the CRCA applies in your consideration of two questions (which you believe are answered in the affirmative when related to the Section 44(1) exemption clause) and then refer to your duty of confidentiality described in Section 18(1) - Revenue and Customs officials may not disclose information which is held by the Revenue and Customs in connection with a function of the Revenue and Customs.
However, you astutely fail to mention that the required justification for Section 18(1) is NOT applicable (as clearly defined in Section 18(2) - (But) subsection (1) does not apply to a disclosure) when (b) it is made in accordance with Section 20 or 21.
I draw your attention primarily to Section 20 - Public interest disclosure alongside (a selection of) subsections as follows:

(1 )Disclosure is in accordance with this section (as mentioned in section 18(2)(b)) if —
(a) it is made on the instructions of the Commissioners (which may be general or specific),
(b) it is of a kind —
(i) to which any of subsections (2) to (7) applies, or
(ii) specified in regulations made by the Treasury, and
(c) the Commissioners are satisfied that it is in the public interest

(2)This subsection applies to a disclosure made —
(a) to a person exercising public functions (whether or not within the United Kingdom),
(b) for the purposes of the prevention or detection of crime, and
(c) in order to comply with an obligation of the United Kingdom, or Her Majesty’s Government, under an international or other agreement relating to the movement of persons, goods or services

(3) This subsection applies to a disclosure if —
(a) it is made to a body which has responsibility for the regulation of a profession,
(b) it relates to misconduct on the part of a member of the profession, and
(c) the misconduct relates to a function of the Revenue and Customs

(6)This subsection applies to a disclosure if it is made—
(a) to a person exercising public functions in relation to public safety or public health, and
(b) for the purposes of those functions

Thus, there appear to be many different reasons for the disclosure to be made should any of the prevailing conditions (as exampled above) outweigh or override the claim of confidentiality - especially when the information requested is clearly in the bounds of public interest.

The 'Knox' Group of companies (and their associates) summarised in this FOI request have been responsible for the introduction and promotion of payroll arrangements and payment mechanisms over many years and which are now being (retrospectively) categorised as ‘not working’ by HMRC. All these are listed on Companies House with the relevant entries, dates and associated people. A recent BBC Radio 4 broadcast (File on 4 - Taxing Situations) profiled individuals who had used these arrangements and included the results of investigations carried out by those BBC journalists responsible for the programme, with facts, links and connections to those companies being clearly established. These findings were further discussed and referenced by members of the Finance Bill Sub-Committee and those invited for interview at the meeting held on 26 October 2020. Concerns were raised by both members of the committee and those providing evidence during interview that there was clear potential for cases of fraud to be considered (and pursued) following these investigations, and that a consumer protection approach should be at the forefront of any attempts to tackle these promoters by HMRC, which has evidently NOT been the case to date.

This group of companies is still very active and functioning as normal – a brief check on https://www.knoxprivateoffice.com/people/ will confirm. HMRC, on direction from the Government and HMT, have a duty to follow the law and pursue these promoters for any perceived liability associated with the schemes they introduced and promoted. The Government introduced the POTAS (Promoters of Tax Avoidance Schemes) legislation in 2014 in a supposed attempt to ‘clamp down’ on these companies – a previous Parliamentary question from the Midlothian MP Owen Thompson revealed that NO penalties have ever been issued under these legislative powers since 2013. I believe this statistic remains unchanged.

As the government, HM Treasury and HMRC have all made numerous public announcements, both past and present, outlining their intention to 'clamp down' on promoters of tax avoidance, and given the fact that those companies and individuals associated with the 'Knox' group remain in plain sight, I would strongly suggest that the disclosure of evidential information, particularly those written communications and call transcripts between HMRC and these companies, is undoubtedly in the public interest. I would hope that, following this summary response, HMRC will reconsider their refusal to provide the information sought and to supply all the details (redacted to avoid identification of individuals or other entities) as requested.

I therefore request an internal review of HM Revenue and Customs's handling of this FOI request - should this be refused once again, I will escalate this request to the Information Commissioner whom, I would anticipate, will perhaps be more likely to demonstrate a lack of bias when considering the clear public interest element of this inquiry, especially in light of the aforementioned broadcast, the controversial legislation referenced by the Director of Counter Avoidance at HMRC on the same programme and the increasingly firm line of questioning employed by members of the Finance Bill Sub-Committee on this important, serious and gravely conspicuous subject.

A full history of my FOI request and all correspondence is available on the Internet at this address: https://www.whatdotheyknow.com/request/a...

Yours faithfully,

Adam Bridgen

no-reply@hmrc.ecase.gsi.gov.uk on behalf of FOI Central Team, HM Revenue and Customs

Our ref: IR2020/02469

Dear Mr Bridgen,

Freedom of Information Act 2000 Acknowledgement

Thank you for your communication of 29th October which has been passed to
HMRC's Freedom of Information Team.

We have allocated the above reference which you should quote if you need
to contact us.

The Team will arrange for a reply to be sent to you which will either
comply with HMRC's obligations under Freedom of Information Act or, if we
think it's an enquiry that we don't need to address under the terms of the
Act, let you know why. If it is the latter we will, if possible, pass it
on to a more appropriate part of the Department for answer.

As you will appreciate, the coronavirus pandemic has provided
unprecedented challenges for Government Departments including HMRC. Over
the coming weeks our priorities are to provide critical existing and new
Public Services for Government to support customers during this difficult
time. As a result, resources may be diverted away from usual compliance or
information rights work. HMRC aims to respond to all FOIA Requests within
20 working days. If for whatever reason this timescale cannot be complied
with HMRC will, where possible, write to you explaining the reason for the
delay and providing an estimated time for response.

Yours sincerely

HMRC Freedom of Information Act Team

no-reply@hmrc.ecase.gsi.gov.uk on behalf of FOI Central Team, HM Revenue and Customs

1 Attachment

Dear Mr Bridgen,

We are writing in response to your request for information, received 29
October.

Yours sincerely,

HMRC Freedom of Information Team

Dear Mr. Sutherland,

Thank you for the response to my request for an internal review.

I am disappointed, but unsurprised that you have decided to uphold the original refusal, as the procession of FOI requests relating to the retrospective legislation known as the Loan Charge and HMRC's associated failures in that regard seem to be subject to an even more entrenched and resistant stance from you and your colleagues (both senior and subordinate) in recent months.

As a layman attempting to fully comprehend the complexities of the FOI legislation and the requirement to cross-reference and understand each clause and paragraph within, I trust you will appreciate my frustrations at attempting to procure a simple answer to a simple question and the difficulties in challenging an organisation whose sole purpose (in the context of any FOI request on this subject) is to restrict and limit access wherever possible to information which would genuinely help members of the general public to establish both truth and fact in this matter.

An amateur such as myself (alongside those many others asking for information from a government organisation who persistently appear intent on withholding as much information as possible on this issue) could not hope to compete with the knowledge and experience you must have accrued as HMRC's 'Head of Information Rights', and knowing exactly how to frame or reference a simple request to ensure a straightforward response, knowing how it will be vigorously resisted by civil service professionals such as yourself, is an unenviable hurdle in itself.

However, I can but continue to try.

I understand that, following your latest refusal to provide this information following the internal review, you are under no further obligation (within the framework of this specific request) to reply. You have included numerous references to clauses in both the Freedom of Information Act and the Commissioners for Revenue and Customs Act, which I have spent many hours contemplating, considering and trying to appropriately map back to the specifics of my request. A couple of points on those come to mind, as follows:

1. You reference the absolute exemption in section 2(3)(f)(i) of the FOIA, which (from the extracts below on legislation.gov.uk) indicate -

2. Effect of the exemptions in Part II.
(3) For the purposes of this section, the following provisions of Part II (and no others) are to be regarded as conferring absolute exemption —
[F2](f)section 40(1),
F2 S. 2(3)(f)(fa) substituted for s. 2(3)(f) (25.5.2018) by Data Protection Act 2018 (c. 12), s. 212(1), Sch. 19 para. 56 (with ss. 117, 209, 210, Sch. 20 para. 52); S.I. 2018/625, reg. 2(1)(g)

I can see no reference to (i) listed here - so where could I find that if it is not listed on the government website?

2. You state on one hand that Section 23(1) refers to section 18, then proceed to follow that by stating Section 23 is not aligned with section 18, supposedly limited by two elements, which you refer to as the information element and the identification element. Subsequent to this 'explanation', you then reference section 19(2) of the CRCA, which outlines the functions of the Commissioners and officers of Her Majesty’s Revenue and Customs. You then list other sections of the CRCA which define those 'ancillary powers' relating to the functions of the Commissioners, and the 'interpretation' of those functions, which, in summary, seem to provide unlimited and unfettered power to those Commissioners wherever, and whenever, they see fit in the course of their duties. On the basis of these legislative references and controls in relation to FOI requests, it comes as something of a surprise to see why your organisation would ever provide a single shred of information (as a result of FOI requests made by the general public) when so much 'discretionary' power is firmly consolidated into the holders of this privileged office.

The material substance of your refusal to disclose appears to be on the basis that it would:

a) specify the identity of the person to whom the information relates, or
b) enable the identity of such a person to be deduced.

You communicate that 'even in a redacted format, such information read in conjunction with your request would identify the relevant persons'. As previously clarified, I have absolutely no interest in identifying or establishing the names of any individual who may (or may not) have been contacted by HMRC with regard to the subject matter detailed in my request. ALL companies within the 'Knox' Group are already listed on Companies House - ALL officers of these companies, and those with any significant control, along with filing histories and documents are already PUBLICLY AVAILABLE. If Companies House lists the relevant people associated with this group of companies, why would you choose not to disclose fully redacted letters/communications etc. which provide the requested information, especially when HMRC, on direction from the government and HMT, have a public duty to follow the law and pursue these promoters for any perceived liability associated with the schemes they introduced and promoted?

As I have stated within the body of the FOI request, the government, HM Treasury and HMRC have all made numerous public announcements, both past and present, outlining their intention to 'clamp down' on promoters of tax avoidance. The stark reality is that those companies and individuals associated with the 'Knox' group remain in plain sight, which must, in turn, reasonably conclude that the disclosure of evidential information, particularly those written communications and call transcripts between HMRC and these companies, is clearly in the public interest if we are expected to believe the claims made by these authorities. If this information continues to be withheld, there is the distinct possibility that those seeking the truth on this matter might be justified in their view that senior HMRC officials, or those currently at the helm of HMT and the government are deliberately concealing these important historical documents as a result of the political influence wielded by such wealthy and powerful party donors.

I note from the responses in other (related) FOI requests on this subject that senior people within HMRC have provided the FOI team with media briefing packs and carefully contrived responses to genuine requests for transparency from other members of the public. Those communications revealed in FOI2020/01810 evidence that there is a clear and deep-rooted resistance, at the most senior levels in HMRC, to the supply of any information which would, to quote from those exchanges, 'show the department in a bad light'. It is exceedingly difficult, following your response on this particular FOI, to believe otherwise.

Why were previous FOI requests for information (such as those related to the Morse correspondence between HMRC and HMT, as referenced in my request for an internal review) released, when this is refused - what is the material difference in relation to 'identity'? Is it an arbitrary 'test' exercised when the information sought relates to powerful and influential donors to the party in government alongside those fundamentally responsible for this retrospective legislation? Were those previous requests 'approved' for disclosure by the Commissioners themselves? If so, on what specific grounds, given your steadfast refusal in this case?

As I am now apparently left with no option other than to proceed with a complaint to the Information Commissioner's Office, I will raise this at the earliest opportunity and within the timescale set out in the relevant FOI guidelines.

Yours sincerely,

Adam Bridgen