Freedom of Information Team
S1715
6 Floor
Mr G Taylor
Central Mail Unit
By email:
request-513627-
Newcastle Upon Tyne
xxxxxxxx@xxxxxxxxxxxxxx.xxx
NE98 1ZZ
Email
xxx.xxxxxxx@xxxx.xxx.xxx.xx
Web
www.gov.uk
Date: 18 October 2018
Our ref:
IR2018/02046
Dear Mr Taylor
Freedom of Information Act 2000 (FOIA)
I am writing with reference to your email of 12 September 2018 regarding our response of
the same date to your requests for information under references: FOI2018/01915,
FOI2018/01916, FOI2018/01917 and FOI2018/01918.
You have requested an internal review of HM Revenue and Customs (HMRC) handling of
your FOI request saying:
“I would like to appeal all 4 of these FOI request rejections. I appeal these on the basis that
the estimates are not accurate and for any organisation this would be a relatively straight
forward search or database query taking far less than 3 ½ days to complete all and respond.
Therefore, on this basis I would like appeal this decision.”
Original requests for information:
FOI2018/01915 - In relation to the disguised remuneration legislation in the year Financial
Year to March 2010. Could you please advise, how many individuals declared the use of
loan schemes on their tax returns in this year?
FOI2018/01916 - In relation to the disguised remuneration legislation, please provide me
with details of how many scheme operators/providers who have been investigated by HMRC
and have subsequently been shut down or stopped from trading in relation to scheme
arrangements.
FOI2018/01917 -In relation to the disguised remuneration legislation, please provide me with
details of how many scheme operators/providers who have been identified, how many of
these, including those domiciled outside of the UK have submitted VAT payments to HMRC
in the years 1999 to 2018?
FOI2018/01918 - In relation to the disguised remuneration legislation, please provide me
with details of how many scheme operators/providers who have been investigated by HMRC
and where the arrangements have subsequently been found not to be compliant.
Information is available in large print, audio and Braille formats.
Text Relay service prefix number – 18001
Internal Review
The purpose of an Internal Review is to assess how your FOI request was handled in the
first instance and to determine whether the original decision given to you was correct. This is
an independent review.
The Act gives applicants two rights in respect of information held by a public authority:
(1) a right to be told if the information is held (known as the duty to confirm or deny);
and
(2) a right to have that information communicated subject to any exemption or
exemptions that might apply.
Each of these rights is subject to exemptions under the FOIA.
HMRC received your requests on 28 August 2018 and responded on 12 September 2018.
This was within the statutory deadline in compliance with section 10(1) of the FOIA.
The response also set out HMRC’s review procedure and your right to complain to the
Information Commissioner, as required by section 17(7) of the FOIA.
In the course of this review I will be considering if HMRC was entitled to rely on section 12(1)
FOIA (cost of compliance exceeds appropriate limit) to refuse your requests and that it was
entitled to aggregate your four requests under section 12(4) FOIA and the Fees Regulations.
I will also be considering if you have been provided with sufficient advice and assistance in
narrowing down the scope of your requests to have complied with section 16(1) FOIA (duty
to provide advice and assistance).
Section 12(1) FOIA allows a public authority to refuse a request for information if the
authority estimates that the cost of compliance would exceed the ‘appropriate limit’, as
defined by the Freedom of Information and Data Protection (Appropriate Limit and Fees)
Regulations 2004 SI 2004 No 3244 (“the Fees Regulations.”)
The appropriate limit is set in the Fees Regulations at £600 for central government
departments and £450 for all other public authorities. The Regulations also specify that the
cost of complying with a request must be calculated at the rate of £25 per hour of staff time,
meaning that section 12(1) FOIA effectively imposes a time limit of 24 staff hours for HMRC
for an individual request.
However, under section 12(4) FOIA, when a public authority is estimating whether or not the
cost of compliance with the legislation would exceed the appropriate limit, it may aggregate
two or more requests if the conditions laid out in regulation 5 of the Fees Regulations can be
satisfied.
Regulation 5 of the Fees Regulations provides that:-
“(1) … where two or more requests for information… are made to a public authority—
(a) by one person, or
(b) by different persons who appear to the public authority to be
acting in concert or in pursuance of a campaign,
the estimated cost of complying with any of the requests is to be taken to be
the total costs which may be taken into account by the authority, under
regulation 4, of complying with all of them.
(2) This regulation applies in circumstances in which –
(a) the two or more requests referred to in paragraph (1) relate, to any extent,
to the same or similar information, and
(b) those requests are received by the public authority within any period of
sixty consecutive working days.”
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On 28 August 2018, HMRC received your four requests for information under the FOIA, all
of your requests were with regard to disguised remuneration. I therefore find the above
conditions to be satisfied and that HMRC are entitled to consider you request under section
12(4) FOIA.
As provided above, the estimated cost of complying with any of your four requests is now to
be taken to be the total costs which may be taken into account by HMRC of complying with
all of your requests.
For the purpose of this review I have considered the estimated cost of compliance for your
request under reference FOI2018/01917 in detail, the wording of which I have provided
below:
‘In relation to the disguised remuneration legislation, please provide me with details
of how many scheme operators/providers who have been identified, how many of
these, including those domiciled outside of the UK have submitted VAT payments to
HMRC in the years 1999 to 2018?’
To quantify HMRC’s estimated cost of compliance I have initially sought to determine the
total number of operators/providers to which you refer. I can advise that there are in excess
of 250 disguised remuneration schemes and that these can be operated, provided or
promoted by multiple entities.
Your request requires the individual VAT status of each of these entities to be determined
and then checked against a separate VAT database.
HMRC still relies on a number of legacy IT systems as well as manual records. To extract,
cross-check and analyse the data you have requested would mean interrogating multiple
databases and financial systems as well as some manual viewing of case level data that is
not easily extractable.
Even if it were taken that each scheme was operated, provided and promoted by just a
single entity this would allow just over five minutes to manually review the associated VAT
records in order to provide the requested information within the FOIA cost limits.
For the reasons explained above, I therefore find HMRC are entitled to rely upon section
12(1) FOIA with regards this request and that in accordance with the previously provided
Fees Regulations are entitled to rely upon section 12(4) FOIA for all four of your aggregated
requests.
I will now turn to the section 16(1) FOIA advice and assistance aspect of your initial
response. I note that for the above request HMRC were unable to provide you with any
assistance to narrow the scope of your request.
Having reviewed the circumstances in detail, I agree that due to the number of schemes
involved and the multiple entities associated to them no further advice can be provided for
this request.
With regards your requests FOI2018/01916 and FOI2018/01918, I am satisfied that HMRC
had previously provided responses to identical or similar requests within a reasonable period
of time to your request and that by directing yourself to these documents HMRC met their
obligations under section 16(1) FOIA.
For your request FOI2018/01915, I recognise that whilst you were directed to similar
information which had previously been provided in response to a separate request it was not
for the time period you requested.
On a discretionary basis I would advise that 1,620 individuals declared the use of a loan
scheme on their Self Assessment (SA) tax return during the tax year 2009/10. This
information is obtained from SA data where the individual has declared a ‘Scheme
Reference Number’ (SRN) related to a disguised remuneration scheme declared under the
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Disclosure of Tax Avoidance Schemes (DOTAS) regime. It does not include declarations
which may have been made in the notes/other information sections of the SA tax return.
Conclusion
In conclusion, I am satisfied that HMRC’s response of 12 September 2018 was correct and
compliant with the FOIA.
However, I do find that further explanation and costs estimates could have been provided. I
hope that the further detail I have now provided along with the additional information in
response to FOI2018/01915 addresses your concerns.
Appeal process
If you are not content with the outcome of this internal review, you can complain to the
Information Commissioner’s Office (ICO). You can make a complaint to the ICO by post to:
The Information Commissioner’s Office, Wycliffe House, Water Lane, Wilmslow, Cheshire
SK9 5AF. Instructions about this process are available at the following link:
https://ico.org.uk/concerns/
Yours sincerely,
Freedom of Information Team
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