Reuters business restructuring documents subject to legal privilege

In Refinitiv UK Holdings Ltd & Thomson Reuters Group Ltd v HMRC [2023] TC08743, the First Tier Tribunal (FTT) found that information requested by a Schedule 36 notice was subject to Legal Professional Privilege.

• HMRC issued Schedule 36 Information Notices as part of enquiries into a potential liability to Diverted Profits Tax.
• The appellants claimed that the documents requested were subject to Legal and Professional Privilege so did not need to be provided.
• The appellants applied to the First Tier Tribunal to resolve the dispute.

The FTT found:

• The burden of proof was on the applicants to establish privilege.
• Documents are privileged if:
  • They are confidential communications between a client and their lawyer for the dominant purpose of giving or receiving legal advice or litigation along with secondary documents which discuss these topics.
  • It also extends to documents that form a continuum of communications in respect of advice.
• The FTT reviewed the documents in question and concluded they were privileged as:
  • The documents that were requested covered a commercially sensitive business transition.
  • They covered structural changes within the group and the impacts on transfer pricing and Base Erosion and Profit Shifting (BEPS).
  • They represented part of the continuum of communications in respect of legal advice from lawyers to the appellant’s senior decision-makers.

The appeal was allowed.

Useful guides on this topic

Sch 36 Information Notices (subscriber)
What is a Schedule 36 Information Notice? When can HMRC issue one? What rights does the taxpayer have when an information notice is issued?

Sch 36 information notices: At a glance (freeview)
What is a Schedule 36 Information Notice? When can HMRC issue one? What rights does the taxpayer have when an information notice is issued?

Diverted Profits Tax
Large multinational enterprises (MNEs) that use arrangements between connected parties to divert profits away from the UK and avoid UK tax, will be subject to the Diverted Profits Tax (DPT). Who does it apply to? What are the rules?

BEPS & Diverted Profits Tax (for SME owners)
What is BEPS? What is Diverted Profits Tax? Will either of these affect me or my SME clients?

External links

Refinitiv UK Holdings Ltd & Thomson Reuters Group Ltd v HMRC [2023] TC08743