Analysis
HMRC opened an enquiry into Mr Behague’s (the appellant) self-assessment return and issued a notice to the appellant under para 1 of sch 36 of the Finance Act 2008. This notice requested the provision, to HMRC, of a client engagement letter and a report issued to the appellant by his solicitors. The appellant appealed this notice and claimed legal professional privilege (LLP) applied to the documents.
HMRC accepted that communications between a solicitor and his client were privileged to the extent they related to the giving or obtaining of legal advice, however HMRC argued that an engagement letter merely set out the terms of acting and did not provide advice and therefore it should not attract LLP. Furthermore HMRC considered that the solicitor’s report gave wealth management advice rather than legal advice and as such it did not attract LLP either.
While not being tasked with determining the success or otherwise of the appeal against HMRC’s notice, the First-Tier Tribunal needed to decide whether LLP should properly apply to the documents. The matter was dealt with on the basis of written submissions. Judge Mosedale allowed the appellant’s appeal in part as to the engagement letter and in full as to the report and its associated schedules.
Held:
(1) An engagement letter does not inherently attract LLP (Dickenson) in so far as it sets out the terms of the contract between a solicitor and his client, however an engagement letter is privileged to the extent that the letter sets out the nature of the advice which will be covered under the retainer. The parts of the appellant’s engagement letter pertaining to the advice being sought were subject to LLP.
(2) The report, excluding its schedules, was largely comprised of legal advice. As such it was subject to LLP and did not need to be disclosed.
(3) The individual documents which formed the schedules would not in themselves attract LLP as these documents were made up of HMRC documentation and generic guidance issued to a number of clients rather than bespoke legal advice to the appellant. However, LLP would attach to the schedules here otherwise, if the schedules were disclosed, the subject matter of the legal advice given to the appellant could be easily identified.
JUDGMENT TRIBUNAL JUDGE: [1] HMRC opened an enquiry on 20 November 2007 into Mr Behague’s self assessment for the year ended 5 April 2005. On 23 5 April 2012 HMRC issued Mr Behague with a notice to provide information and documents under para 1 of sch 36 of the Finance Act 2008. On 21 May …Continue reading "Behague v HMRC [2013] UKFTT 596 (TC)"