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In a unique decision which balanced the public interest in naming and shaming tax defaulters against the privacy and reputational rights of the individual, a solicitor accused of under-declaring his liability to pay Stamp Duty on a property purchase has been granted at least temporary anonymity by a tax tribunal.
The solicitor and his wife had jointly bought a property for more than £760,000 but had declared the purchase price to HM Revenue and Customs (HMRC) as £100,000. Although more than £30,000 in Stamp Duty was due on the transaction, none was paid until HMRC launched an inquiry.
Upon discovery of the default, the couple signed a settlement agreement with HMRC by which they paid the sum due, plus a penalty of more than £16,000. However, when the couple learnt that their names would appear on a list of deliberate defaulters, they appealed to the First-tier Tribunal (FTT) against the penalty.
The couple insisted that their under-declaration was inadvertent. They argued that the publication of their names on the list would be ‘akin to libel’ and was likely to have serious professional consequences for the solicitor. However, HMRC argued that the couple had been ‘prepared to admit to tax evasion as long as no one found out about it’ and that the public interest demanded full public disclosure.
In refusing permission to appeal, the FTT found that the settlement had not been conditional on the couple’s names being kept out of the public domain. The full and final agreement reached had the force of contract and the FTT therefore had no jurisdiction to consider the matter.
Turning to the privacy issues raised, the FTT found that it would be ‘inimical to justice’ to assist the solicitor in hiding his alleged misdemeanours from the Solicitors Regulation Authority (SRA), his clients and potential clients. His professional status, far from justifying anonymity, positively favoured full publication.
However, in granting the couple anonymity until the end of the appellate process, the FTT noted that HMRC’s accusation of dishonesty had yet to be subjected to proof and that the couple had an arguable case that they had made an honest mistake. The decision meant that the couple would not be publicly named until all possible avenues of appeal against the penalty had been exhausted.
