Case Reference: FT/EA/2025/0018
Information Rights
Heard by Cloud Video Platform
Before
JUDGE HEALD
MEMBER SIVERS
MEMBER TAYLOR
Between
HARTLEY FOSTER
Appellant
and
(1) THE INFORMATION COMMISSIONER
(2) HM REVENUE AND CUSTOMS
Respondents
Representation:
The Appellant represented himself
For the 1st Respondent: there was no attendance or representation
For the 2nd Respondent: Mr Robert Cohen of Counsel.
Decision: The appeal is dismissed.
REASONS
This appeal is brought by section 57 Freedom of Information Act 2000. It relates to a request for information made by the Appellant to the 2nd Respondent on 5 January 2024 and the 1st Respondent's Decision Notice (ref IC-309051-Q1D4) dated 28 November 2024.
What follows is a summary of the submissions, evidence and our view of the law. It does not seek to provide every step of our reasoning. The absence of a reference by us to any specific submission or evidence does not mean it has not been considered.
Page numbers in brackets refer to the open bundle, if to the closed bundle then the letters CB are added and if to the authorities bundle then the letters AB are added.
In this Decision the following definitions are adopted:-
FOIA | |
the public interest balance test in section 2 FOIA | the PIBT |
The Finance Act 2016 | FA16 |
The Tribunal Procedure (First-tier Tribunal) (General Regulatory Chamber) Rules 2009 | 2009 Rules |
The Information Commissioner | the IC |
HM Revenue and Customs | HMRC |
Decision Notice | DN |
request for information made by the Appellant | the Request |
the Serial Tax Avoiders Scheme | the STAR |
Upper Tribunal and First- tier Tribunal | UT and FtT |
guidance issued by the ICO | the Guidance |
Evidence and matters considered
For the appeal we had:-
a bundle of 583 pdf pages
a closed bundle of 57 pages held pursuant to rule 14(6) 2009 Rules.
an authorities bundle of 486 pdf pages.
the Appellant's skeleton argument of 12 July 2025 and HMRC's skeleton of 10 July 2025.
A gist of the closed hearing was prepared by counsel for HMRC and provided to the Appellant shortly after it had concluded.
The Bundle contained witness statements for HMRC provided by Mr Adam Cheung and Mr James Mangan. The Closed Bundle contained Mr Mangan's statement without redactions. Mr Cheung said that he had worked for HMRC since July 2015 and had been a Technical Advisor for 6 years. He is in the Counter Avoidance Technical Team. Mr Mangan has worked for HMRC since 2022. He is the correspondence lead in the Counter Avoidance Briefing and Engagement Team and leads on the handling of the internal reviews of FOIA requests.
Both of HMRC's witnesses attended the appeal. Neither was called to give evidence in the open hearing and were not cross examined. Mr Mangan was asked questions by the panel in the closed part of the hearing.
Background
The Appellant, who is a barrister specialising in tax law, asked HMRC for information about their use of the STAR. He said in his Grounds of Appeal (29) that there were no reported cases that concerned it and told us he could find no reference to how HMRC had used these provisions. HMRC refused to answer the Request seeking to prevent, in their view, the likely prejudice to the "...assessment or collection of any tax or duty or of any imposition of a similar nature."
The STAR derives from an anti-avoidance legislative provision in FA16. Section 159 FA16 says that "Schedule 18 contains provision about the issue of warning notices to, and further sanctions for, persons who incur a relevant defeat in relation to arrangements."
In the notes to the Bill that became FA16 the STAR was explained in summary as follows (279AB):-
This clause introduces a new regime of warnings and escalating sanctions for those who persistently engage in tax avoidance schemes which HM Revenue and Customs (HMRC) defeats. Following the first defeat of a tax avoidance scheme, HMRC will place the taxpayer on warning that the use of any avoidance schemes in the following 5 years which HMRC defeats, will result in a penalty being issued, based on the amount of the understated tax.
If the taxpayer uses any further schemes while under warning which HMRC defeats, the rate of penalty will be increased to a maximum of 60% of the understated tax. If HMRC defeat three tax avoidance schemes while the taxpayer is on warning, the taxpayer's details can be published. If three avoidance schemes which exploit reliefs are used while under warning and HMRC defeat them, the taxpayer will be denied further benefit of reliefs until the warning period expires. The regime comes into effect on 6 April 2017"
HMRC in its Response (56) described avoidance as follows:-
"Tax avoidance involves bending the rules of the tax system to try to gain a tax advantage that Parliament never intended. It often involves contrived, artificial transactions that serve little or no purpose other than to produce this advantage. It involves operating within the letter, but not the spirit, of the law"
In his reply (68) the Appellant said:-
The expression “tax avoidance” does not ‘mean just what it says’. Providing an exact definition of what constitutes tax avoidance, save ex post facto, is not straightforward, and has been the subject of considerable judicial and Parliamentary consideration. In IRC v Willoughby [1997] STC 995, Lord Nolan described tax avoidance as an “elusive concept” and said that “the hallmark of tax avoidance is that the taxpayer reduced his liability to tax without incurring the economic consequences that Parliament intended to be suffered by any taxpayer qualifying for such reduction in his tax liability” But, the difficulty with this approach is twofold. First, it is a conclusion, not a test. Applying this approach would not determine, for example, whether the third example set out above was tax avoidance. Secondly, it assumes that Parliament has defined the particular economic consequences that need to be suffered for the taxpayer to qualify for relief from taxation; and that is often not the case. Further, as Lord Hoffmann said:
“Parliament may not be content to describe the economic event which should attract tax because it does not trust the courts to understand such a concept and apply it in a practical way. Instead, it enacts a mass of detailed rules which it is hoped will tie up the taxpayer in a net from which he cannot escape. But sometimes there are holes in the net and the courts find that they cannot plug them by appealing to the economic event which, at a higher level of generality, it appears that Parliament wished to tax.”
However it is defined, HMRC seeks to reduce avoidance in various ways including by challenging tax avoidance schemes in court proceedings and by making it known that a failed scheme can lead to financial penalties and costs.
Mr Cheung said in his statement:-
STAR was introduced in Schedule 18 of the Finance Act 2016 with the objective of deterring taxpayers from using tax avoidance schemes.
STAR was introduced in response to a persistent minority of taxpayers who continually seek ways to reduce the amount of tax they pay. These serial avoiders are seen as a small group of risk takers who are repeatedly involved in tax avoidance schemes and avoiding significant amounts of tax in the process. The regime aims to change the behaviour of those who repeatedly engage in tax avoidance to reduce their tax liability and to discourage them from using tax avoidance schemes in the future. Its purpose is to deter taxpayers from using tax avoidance arrangements to gain a tax advantage that is not intended by any relevant legislation."(544).
He cites (544) a background note to the Bill (that became FA16) which states (283AB):-
"This regime has been introduced to change the behaviour of those who persistently engage in tax avoidance schemes, often using more than one scheme on a return or using schemes on a number of successive returns. These tax avoiders do not see a significant risk resulting from their behaviour. The new regime allows HMRC to place users of defeated tax avoidance schemes on warning and provides that they will face targeted sanctions if they persist in their behaviour. These sanctions will escalate in their impact for taxpayers who fail to amend their behaviour. This will discourage such avoiders from continuing to engage in tax avoidance and to dissuade others from becoming serial tax avoiders."
The Appellant took the Tribunal through the relevant parts of FA16 including how a "relevant defeat" would be incurred and the sanctions and penalties available to HMRC such as the naming "and shaming" provisions in para 18 Schedule 18 and the penalty provisions of para 30.
In the Request (85) the Appellant summarised schedule 18 FA16 as follows:-
"Schedule 18, Finance Act 2016 introduced provisions in relation to "serial tax avoidance". The provisions enable HM Revenue & Customs ("HMRC") to: (i) give warning notices to persons who incur "relevant defeats"(as defined in paragraph 11); (ii) publish information about persons if the conditions in paragraph 18 are met; (iii) issue "restriction of relief notices" if the conditions in paragraph 19 are met; and (iv) issue penalties if the conditions in paragraph 30 are met."
Role of the Tribunal
The Tribunal's role in an appeal by section 57 FOIA is set out in section 58 FOIA which provides that:-
If on an appeal under section 57 the Tribunal considers—
that the notice against which the appeal is brought is not in accordance with the law, or
to the extent that the notice involved an exercise of discretion by the Commissioner, that he ought to have exercised his discretion differently, the Tribunal shall allow the appeal or substitute such other notice as could have been served by the Commissioner; and in any other case the Tribunal shall dismiss the appeal.
On such an appeal, the Tribunal may review any finding of fact on which the notice in question was based.
The Tribunal exercises a full merits appellate jurisdiction and so stands in the shoes of the Commissioner and decides which (if any) exemptions apply (Information Commissioner v Malnick and Advisory Committee On Business Appointments [2018] UKUT 72 (AAC) (at 90)). It is not the Tribunal's role to carry out a procedural review of the IC's decision making process (Peter Wilson -v- The Information Commissioner [2022] UKFTT 0149). In considering the appeal we also noted the principles set out in Forstater v Information Commissioner and others [2023] UKUT 303 (AAC) where the UT at para 40 said (245AB):-
the “ordinary presumption” is that it is for an appellant to prove their case. The burden will rest with the appellant except where statute expressly or impliedly provides otherwise: Khan v Custom and Excise Commissioners [2006] EWCA Civ 89; [2006] STC 1167 at [73.7]. Neither FOIA nor the Tribunal Procedure (First-tier Tribunal) (General Regulatory Chamber) Rules 2008 contain any express provision about the burden of proof and neither by implication remove the ‘ordinary presumption’ either; and
however, the concept of the burden of proof is of secondary importance in tribunal proceedings which involve a full merits review, since to apply strict burdens of proof may prevent the tribunal from properly discharging its responsibility to decide the facts for itself and/or exercise any discretion afresh: Doorstep Dispensaree at [159]"
Request to Appeal (summary)
On 5 January 2024 the Appellant made the Request to HMRC (85) which in summary asked:-
"Please provide information in respect of HMRC’s use of these powers under Schedule 18, as summarised above, since 6 April 2017; in particular, please provide me with the following information for each of the tax years ended 6 April 2017 to 2023:
The number of warning notices issued by HMRC, and the number of recipients of warning notices;
The number of persons in respect of whom information was published (in accordance with paragraph 18);
The number of restriction of relief notices issued by HMRC, the number of recipients of restriction of relief notices, and the total value of the relief restricted; and
The number of penalties issued by HMRC (under paragraph 30), the number of recipients of such penalties, and the total value of the penalties imposed".
HMRC responded on 30 January 2024 (87). It said that it held information within the scope of the Request but refused to disclose it relying on the exemption at section 31(1)(d) FOIA.
A request for an internal review was sought but not initially provided. The Appellant, on 23 May 2024, then complained to the IC (103) and this was followed on 29 May 2024 by a response from HMRC (117) in which it maintained its position. On 28 November 2024 the IC issued the DN in which it is concluded as follows:-
The complainant has requested information relating to the Serial Tax Avoidance Regime (STAR). HMRC refused to disclose the requested information in reliance on the exemption at section 31(1)(d) of FOIA (prejudice to the assessment and collection of tax).
The Commissioner's decision is that the exemption is engaged and the public interest in maintaining the exemption outweighs the public interest in disclosure. The Commissioner does not require further step."
This appeal is from the DN. It was commenced on 14 December 2024 (15) and is supported by Grounds of Appeal. The IC responded on 10 February 2025 (43) and HMRC responded on 10 February 2025. The Appellant replied on 20 February 2025 (66).
FOIA
FOIA provides that any person making a request for information to a public authority is entitled to be informed in writing if that information is held (section 1(1) (a) FOIA) and if that is the case to be provided with that information (section 1 (1) (b) FOIA). Section 31(1)FOIA provides an exemption to this. It states:-
"Information which is not exempt information by virtue of section 30 is exempt information if its disclosure under this Act would...be likely to, prejudice—(d)the assessment or collection of any tax or duty or of any imposition of a similar nature."
This exemption, if engaged, is subject to the PIBT that "In all the circumstances of the case, the public interest in maintaining the exemption outweighs the public interest in disclosing the information."
The time for determining the PIBT is the date the public authority makes its decision on the relevant request (Montague v ICO and Department for Business and Trade [2022] UKUT 104) which in this case is 30 January 2024.
Issues
The question for the Tribunal was to decide whether the DN was in accordance with the law and to the extent that the DN involved an exercise of discretion whether the IC exercised it correctly. More particularly the issue was whether (as the IC says in the DN) the exemption is engaged and, if it is, then whether the public interest in maintaining the exemption outweighs the public interest in disclosure of the information requested.
As regards engagement of this exemption HMRC and the Appellant set out a slightly different set of propositions. We were referred to a number of FtT and UT authorities. We particularly noted the FtT decision in Hogan-v- The Information Commissioner and Oxford City Council (EA2005/0026 & EA/2005/0030) as approved by the Court of Appeal in Department for Work and Pensions v Information Commissioner [2016] EWCA civ 758. In summary HMRC has to:-
identify the applicable interest.
show that "some causal relationship" exists between the requested disclosure and the relevant prejudice being claimed remembering that disclosure is to the world and that HMRC relied on the "likely to prejudice " and not "would prejudice " test and that in Hogan the FtT said that this meant a chance that the prejudice occurs is more than a "hypothetical or remote possibility" but there is a "real significantrisk".
show that the prejudice is "real actual or of substance" which was referred to in Hogan as a "de minimis threshold".
By way of reply the Appellant referred the Tribunal to the decision in DWP where the UT said ”It is well-established that the prejudice must be real, actual or of substance, and that in this context “likely” means a very significant and weighty chance of prejudice..."
The Appellant's case on engagement of the exemption
The Appellant made submissions on (a)the relationship between the harm and the applicable interest in the exemption (b) the causal link and (c) the level of harm.
He said that the harm put forward by HMRC must relate to the interest in section 38(1)(d) FOIA which in this case is prejudice to the assessment and/or collection of tax. He said that the STAR provisions and sanctions did not contain any which enabled HMRC to raise tax assessments or collect tax. He referred to the DN at para 15 (8) and said that the IC was wrong to say that "tax" was a broad term. We were referred to the Guidance which listed the sorts of items that would be included such as NIC, local taxation and duty but the Appellant said that even this did not include the STAR sanctions such as "naming and shaming".
The Appellant said that there needed to be a direct link between the information and the collection or assessment of tax such as in Doherty-v- the Information Commissioner and HMRC EA/2011/0202 (184AB) where the withheld information was HMRC's view on an Inheritance Tax loophole.
The Appellant said that the STAR provisions are not tax provisions that result in a person being assessed for tax or having tax collected and so section 31(1)(d) FOIA is not engaged.
On the causal link the Appellant indicated that the FtT decision in Hemsley -v- The Information Commissioner and The Chief Constable of Northamptonshire EA/2025/0026 (relied on by HMRC) was irrelevant as it was only concerned with the PIBT.
The Appellant said that for this exemption to be established the prejudice caused must be real actual and of substance (or as said by the IC "real and significant"). He referred to HMRC's skeleton at para 16 which said:-
The prejudice identified is that releasing information as to the use of STAR would make it easier for those intent on avoiding tax to do so, and would encourage others to pursue tax avoidance. Releasing this information would make it easier for those intent on tax avoidance to identify patterns in enforcement, determine resource allocation, and adapt their behaviour to evade scrutiny. This would be likely to increase the frequency of tax avoidance and therefore lead to less tax being assessed and collected than would otherwise be the case. This is ‘actual harm’ for the purposes of section 31(1)(d) FOIA"
He broke this down into the five elements of what he said HMRC were asserting being:-
if someone were to have the information requested they would be able to work out how HMRC deployed its resources onto STAR activity
from this it could be worked conclusively how HMRC were intending to engage with the STAR provisions going forward into the relevant tax years ahead
all those intent on tax avoidance will or are likely to adapt their planning to counter what they had discovered
they will do so by increasing their tax avoidance activity
that increase in avoidance will result in less tax being collected or less assessed.
In his submission there was no possibility of all the above arising from HMRC disclosing the information requested even if it related to very recent tax years. He referred to the DN from para 18 (9) (and at para 31 of the response) where the IC said:-
19... He accepts that disclosure of the requested information may or may not assist the public in assessing the resources assigned by HMRC to STAR sanctions, for example on the basis that a higher number of sanctions may suggest that more resources have been committed. However the inverse is not necessarily the case; there may be several reasons as to why a lower number of sanctions might have been issued.
It was also his submission that:-
(a) it cannot be argued that in knowing in 2024 that a particular number of STAR penalties were issued in prior tax years one could say exactly how many HMRC staff and resources were going to be deployed in the future.
evading scrutiny and entering into tax avoidance activity are not synonymous with each other
tax avoidance does not lead inevitably to the collection of less tax because for example if a scheme were to be found to be effective by the Courts then that would lead to the right amount of tax being collected not less tax than was due. Further if a scheme is defeated that also does not necessarily lead to less tax being paid and when penalties and interest are added it is likely more is collected.
In summary the Appellant said that each of the issues put forward by HMRC were "wholly fanciful largely errant pure speculation" which did not meet the applicable test.
In relation to the need for a clear causal link to the relevant prejudice the Appellant said that this had not been demonstrated by HMRC. He pointed to the letter from the IC to HMRC (137) where they had said:-
"Please also demonstrate a clear causal link between disclosure of the specific requested information and the prejudice you have identified, bearing in mind that the prejudice claimed must be real and significant rather than speculative. It is not clear from the refusal notice or internal review letter how the requested information would be of practical assistance to tax avoiders."
and to para 9 of the DN (7) where the IC said:-
"secondly, the public authority must be able to demonstrate that some causal relationship exists between the potential confirmation or denial and the prejudice which the exemption is designed to protect. Furthermore, the resultant prejudice which is alleged must be real, actual or of substance"
He also referred to paras 17-19 of the DN (8) and in particular the IC's conclusion with which he agreed that:-
"19...He accepts that disclosure of the requested information may or may not assist the public in assessing the resources assigned by HMRC to STAR sanctions, for example on the basis that a higher number of sanctions may suggest that more resources have been committed. However the inverse is not necessarily the case; there may be several reasons as to why a lower number of sanctions might have been issued."
In his view the issue on the appeal was not analogous causally with Doherty where the disputed material was HMRC's internal view on a tax loophole.
In his submission the DN was in error because while on the one hand it said that HMRC had not demonstrated a causal link between disclosure and harm it then (for example at para 23 page 10 of the DN) said there was such a link. This he said was "irrational and unreasonable".
Closed Hearing
We held a closed hearing and reviewed material held by rule 14(6) 2009 Rules including Mr Mangan's unredacted statement. Mr Mangan also answered questions on behalf of HMRC. Counsel for HMRC prepared a gist of this part of the hearing which was provided to the Appellant during the appeal hearing.
HMRC's case on the engagement of the exemption
Counsel for HMRC made submissions relying on Hogan as to the level of the harm that HMRC needed to show for the exemption to be engaged and said that in their view (remembering they rely on the "likely to prejudice" test) it was not as great as the "stark and troubling level of prejudice " suggested by the Appellant.
In Counsel's submission there was also a need for the Tribunal to see the question of prejudice and the PIBT with a degree of connection especially when considering whether the PIBT is in favour or against disclosure. We were referred to Hemsley and to Armitt -v- the Information Commissioner & The Home Office EA/2012/0042 wherethe information sought was analogous to this case and inwhich, while only having to decide the question of the PIBT, the FtT in doing so considered the extent of the possible prejudice.
HMRC's case is (without being focused on questions of tax law and what constitutes avoidance) based on a need to prevent avoidance and it says that where it does that gives rise to an increase in revenue. HMRC says that informing the world as to the precise way in which the STAR provisions have been used and HMRC's tactical position gives rise to a real risk that those who want to avoid tax and the promoters of such schemes will be better placed to plan and be effective in that avoidance activity. It was counsel's submission that this self-evidently and as a matter of common sense involved there being increased difficulties for HMRC and the risk of less tax being collected or assessed. We noted the Appellant's disagreement with this in his reply at the hearing.
As regards the suggestion that tax etc is not collected or assessed by the STAR regime HMRC's submission was that such a proposition was misconceived because while the STAR itself may not involve the direct assessment or collection of a particular tax it operates more widely to dis-incentivise avoidance activity by tax payers and promoters of avoidance schemes and it follows that if this is weakened by disclosure a likely prejudice would be caused. We noted the Appellant's submission in his reply that the STAR is not focused on promoters, only tax payers.
Counsel referred to Doherty where the FtT at para 8 said (184AB):-
"In any event it does not undermine the contention that if the withheld information was disclosed there would be a real and significant risk that, pending amending legislation, less inheritance tax would be assessed and collected than would otherwise be the case."
and it was his submission that by deleting the word "inheritance" that proposition also applied to this appeal.
We were referred to the DN where at para 22 (9) the IC said:-
"The commissioner acknowledges that part of STAR's purpose is to deter individuals from engaging in tax avoidance arrangements. However he disagrees with the complainant's position regarding undermining that deterrent. It is obvious that, in theory at least, disclosing information about the consequences of attempting tax avoidance should deter individuals from attempting tax avoidance (and thus suffering those consequences). However, this is not the only outcome that would result from disclosure. HMRC has set out its concerns that disclosure may also have the unwanted consequence of encouraging attempts at tax avoidance, which would be harmful to HRMC's ability to collect tax."
It was HMRC's position that the IC was correct because while disclosure to some may have no prejudicial effect or even enhance tax collection disclosure to others who were determined to seek to avoid tax or promote tax avoidance would harm HMRC's ability to collect tax.
In conclusion HMRC said by reference to Hogan and the evidence provided that the DN showed no error of law and:-
the applicable interest is the assessment or collection of any tax or duty or of any imposition of a similar nature.
the nature of the prejudice being considered which is above a de minimis level and is real actual and of substance is the risk that those wishing to avoid tax and promote schemes to avoid tax will use the knowledge gained from disclosure to assist them in this course of action.
the likelihood of the prejudice (being more than hypothetical or remote) had been satisfied by the submissions and evidence in the closed hearing.
The tribunal's decision on engagement
Section 31(1)(d) FOIA provides an exemption from the obligation for a public authority to disclose information if doing so would be likely to prejudice the assessment or collection of any tax or duty or of any imposition of a similar nature.
The powers granted to HMRC by the STAR provisions of FA16 are to take steps such as to issue warning notices, publish information and issue penalties. In Schedule 18 there are no tax assessing or collection provisions of the sort seen in national and local legislation by which income tax, capital gains tax, inheritance tax, council tax and others are assessed and collected. No one pays more or less tax as a result of a tax raising provision in schedule 18 of FA16.
Avoiding tax is not a criminal offence and as the Appellant explained in his reply (68) there are many differences of view as to the definition of tax avoidance and whether it is in broad terms "simply wrong". While acknowledging the absence of an agreed definition we do accept that avoidance is activity by which tax payers seek to act to reduce the tax that would otherwise be owed. Some avoidance "works" because either it is not challenged or that challenge is unsuccessful. Some does not because for example the arrangement is found to be ineffective.
The STAR provisions while not creating tax obligations are part of HMRC's powers to deter avoidance in this case by targeting those who persistently and unsuccessfully try to reduce tax by avoidance measures. If disclosure were to reduce HMRC's effectiveness in deterring avoidance the disclosure would be the cause of there being a very significant and weighty chance of there being prejudiceto tax collection or assessment.
The Appellant has specialist knowledge about matters of tax law and we accept that from that position of knowledge it is his view that disclosure of the information requested would not be likely to cause that prejudice. However, the panel were able to see information in the closed hearing and see the redacted parts of Mr Mangan's evidence and ask him questions from which we do not share the Appellant's view.
It is noteworthy that the STAR targets those who are "serial avoiders" who it is reasonable to conclude are more focused than others on seeking ways to avoid tax and will look for and use information to assist this activity. Intelligence about HMRC's approach to a particular issue including the STAR even if it is from prior years would be of interest and use to such people.
From what we saw in the closed material and were told by Mr Mangan in evidence (including about other experiences) it was our conclusion that disclosure to the world of the answers to the Request would be of interest to and used by those seeking ways to conduct avoidance activity. We also concluded that having the information would directly cause such people to have certain tactical advantages when formulating their own plans that they would not otherwise have had. This then would cause there to be a very significant and weighty chance of there being prejudiceto tax collection or assessment.
Accordingly in our view the exemption was engaged.
The PIBT
The parties' positions on the PIBT (including the evidence of Mr Mangan at para 17 of his statement) are summarised below.
Matters which were said to favour disclosure included:-
because, as contended for by the Appellant, any prejudice was so limited that no or only very limited weight should be attached to it.
the public interest in HMRC being as open, accountable and transparent as it could be.
the public interest in knowing how HMRC acts and uses the powers granted to it including STAR.
that publication of information about HMRC's activities can operate to reassure the public that its activities are fair and robust.
that it already publishes other action it takes.
because by FOIA the public have a right to know unless there is a good reason not and there is no good reason demonstrated in this case.
Matters which were said to favour the maintenance of the exemption included:-
to prevent the prejudice protected by the exemption which we have concluded is engaged.
the public interest in protecting tax revenue.
to avoid encouraging tax avoidance which (against the public interest) "...would deprive the UK of the money it needs to fund vital public services"
because disclosure (88):-
"...would allow opportunistic individuals and would-be serial tax avoiders, and those advising them, to identify where we are devoting our resources and arrange their activities to reduce the risk of challenge. This would make it harder and more burdensome for HMRC to assess and collect tax from them and put at risk proper assessment and collection of tax."
and (64)
"would risk strategic behavioural changes among tax avoiders, reducing the efficacy of HMRC’s enforcement efforts"
(e) to prevent the undermining of "...public confidence in the fairness of the tax system" and (88) "Evasion and avoidance unfairly shift the tax burden onto honest taxpayers"
to prevent increasing "...the burden on HMRC in tackling tax avoidance."
because where it can and to the extent it can HMRC does publish information about its activities to assist tax collection and to prevent avoidance and so it would be consistent to do so in this case.
As regards the balance
the Appellant referred to HMRC's response (118) where they said:-
"We accept that there is strong public interest in ensuring that HMRC is accountable for its activities and is as transparent as possible about the way it applies its resources. Publishing the information requested would, on the face of it, reassure the public that our compliance activities are fair and robust and applied equitably across the range of customers."
HMRC said that on balance (88):-
"it is not in the public interest to disclose the information requested. We believe that disclosing the information requested could assist would-be tax avoiders, which would be prejudicial to the collection and assessment of tax."
in the DN the IC said
Encouraging, or failing to deter, those who wish to avoid paying their fair share of tax, is not, in the Commissioner's opinion, in the public interest. The Commissioner has accepted that disclosure of the requested information would be likely to have this harmful consequence, and he is mindful that the state of public finances, and public services, is of concern to everyone. Accordingly the Commissioner finds that the public interest in maintaining the exemption at section 31(1)(d) outweighs the public interest in disclosure"
Our decision on the PIBT
We agreed with much said on the PIBT. Our starting point is that we agree with the FtT in Greenwood v Information Commissioner FT/EA/2024/0172 which concluded:-
"Tax evasion and avoidance is clearly against the public interest. It increases the tax burden for honest taxpayers. Compliance and enforcement actions by HMRC also cost public money. HMRC carries out an essential public role in operating and enforcing the tax system. Releasing information which undermines the fair operation of this system is not in the public interest”
Also in our view (as at the date of the response):-
there was a strong public interest in HMRC being open and transparent (where it can). HMRC is an important part of the UK Government and the assessment and collection of tax generally is a topic that impacts very large numbers of the population of the UK. Taxation is a topic of significant political and wider public debate. The existence of a Treasury Select Committee that can scrutinise the work of HMRC (including how it dealt with STAR) only reduces this interest by a small degree.
there is significant public interest in there being transparency and understanding about new powers granted by Parliament and how they are being utilised by HMRC, Such knowledge can operate (in the public interest) to assist with there being confidence in the work of HMRC and that what it does is fair and robust.
providing more operational publicity about STAR would for some work as a deterrent against tax avoidance in the public interest as the enhanced knowledge, even if it was only that the power existed, could prevent avoidance. However, we accept that the opposite is also very likely and a highly motivated avoider could seek to use the information to their advantage.
we agree with the IC that "Encouraging, or failing to deter, those who wish to avoid paying their fair share of tax, is not...in the public interest" and having accepted the exemption is engaged and the risk of harm is significantly higher than at a de minimis level this is a very weighty reason why the PIBT favoured maintenance of the exemption.
while there was force in the Appellant's submission that the public have a right to know we gave that only limited weight as the right to know in FOIA is limited by the exemptions where properly deployed as we have concluded in this appeal.
In our view, principally because of the public interest in not encouraging or failing to deter those who wish to seek to avoid tax, the balance of the PIBT favours the maintenance of the exemption.
Decision
We have concluded that in this matter the exemption is engaged and the PIBT favours maintenance of the exemption. For these reasons and as set out above the DN was in accordance with the law and to the extent that the notice involved an exercise of discretion the IC exercised it correctly.
The appeal is dismissed.
Signed Judge Heald Date 16 October 2025