Her Majesty's Revenue and Customs, the document reminds us at p.32, is governed by the Commissioners for Revenue and Customs Act 2005 (CRCA):
CRCA makes it a criminal offence for HMRC to disclose taxpayer records "except in limited circumstances":
HMRC was created by the Commissioners for Revenue and Customs Act 2005 (CRCA) and its functions are governed by that legislation. HMRC has no common law powers. HMRC’s functions include managing and collecting tax and paying benefits, and matters ancillary to those functions such as employing its staff.
"Criminal sanction"? That's serious. It's the law. Quite properly, CRCA establishes confidentiality as an important principle in the operation of HMRC.
CRCA prohibits the disclosure of information held by HMRC in connection with its functions except in limited circumstances set out in legislation. This prohibition applies to all information held by HMRC in connection with its functions and reflects the importance placed on 'taxpayer confidentiality’ by Parliament when the department was created. There is additional protection for information that relates to an individual or legal entity whose identity is specified in the disclosure or can be deduced from it (‘identifying information’), in the form of a criminal sanction for unlawful disclosure.
But not the only principle. There are exceptions. Or "gateways", as HMRC call them:
CRCA is not obtuse. It recognises that there may be occasions when the confidentiality principle crashes into another admirable principle, e.g. sharing and publishing data for public benefit. On those occasions, the crash must be judiciously untangled and the verdict may go against confidentiality and in favour of a new "information gateway".
HMRC shares information through legislative gateways with a range of public bodies including other government departments, agencies, the Devolved Administrations, Local Authorities and tax authorities in other countries.
The terms of each information gateway are specific as to the type of information that can be disclosed and the purposes to which it can be put.
Each case must be decided on its merits – "The terms of each information gateway are specific as to the type of information that can be disclosed and the purposes to which it can be put".
Does that examination of specific requests for research data work? Yes:
HMRC have published statistics for decades, they make data available on the excellent data.gov.uk, they have an open data strategy and a tax transparency sector board making decisions what to publish, and they have a so-called "Datalab":
1.16 Within the framework of its existing legislation, HMRC already makes a lot of useful data available for broader use.
But that's not enough according to David Gauke MP, Exchequer Secretary to the Treasury, writing in the Foreword to the consultation document. He wants to stand CRCA on its head:
This initiative allows researchers to have access to anonymised data under strictly controlled conditions to undertake projects that contribute to the department’s objectives, such as measuring and improving tax compliance.
Mr Gauke starts from the settled position where HMRC holds taxpayer records confidentially by default and only discloses information in exceptional circumstances if a case can be made for doing so ...
Last month, the Government took two major steps towards realising [significant public] benefits. First, the Government published its response to the Shakespeare Review of Public Sector Information, setting out a framework for pursuing this agenda in the public sector. Secondly, the UK helped secure the G8’s Open Data Charter, which presumes that the data held by Governments will be publicly available unless there is good reason to withhold it. (p.4)
... and he wants to change that so that taxpayer records are available to be disclosed by default and are only withheld in exceptional circumstances if a case can be made for doing so.
Confidentiality is a "core principle". It is one of the safeguards which is "essential" to HMRC's tax farming job. That's what HMRC themselves say. Change the attitude to confidentiality, and you change the essence of HMRC's job. It becomes a different job. Confidentiality is definitive. It is necessary.
1.15 Maintaining confidence in the core principle of ‘taxpayer confidentiality’ and the related safeguards is essential to the effective operation of the tax system, because it supports compliance and willing cooperation. This consultation does not seek to disturb that core principle.
Two questions, to which we shall return:
- Why does Mr Gauke want to take the risk of defying that core principle?
- If a safeguard was at one stage "essential", how can it consistently become optional at a later stage?