LPP claims and standing to resolve disputes

The FTT has held that a taxpayer does not generally have standing to bring proceedings under the Information Notice: Resolution of Disputes as to Privileged Communications Regulations 2009 to resolve a dispute in relation to legal professional privilege (LPP) concerning documents requested by HMRC of its advisers: Castlet Holdings Ltd v HMRC [2024] UKFTT 1101.

The case concerned third party information notices served by HMRC on Nicholas & Co Solicitors and Circleplane Ltd concerning documents they held in relation to Castlet Holdings Ltd. These notices were served pursuant to FA 2008 Schedule 36 para 2. Documents were provided to HMRC, but a claim was made by Nicholas for LPP in respect of a schedule of 14 documents. That claim was rejected by HMRC. In response, Castlet applied under regulation 5 of the Information Notice: Resolution of Disputes as to Privileged Communications Regulations 2009 for the FTT to consider and resolve the dispute as to whether the documents requested were subject to LPP.

HMRC contended that Castlet did not have standing to bring the application under the 2009 Regulations and that the FTT did not, therefore, have jurisdiction to consider the application. The FTT has agreed with that analysis.

The 2009 Regulations provide that “[o]n receipt of the information notice, the taxpayer, third party or person acting on their behalf” may make an application to resolve the dispute. In this case, it was third parties that received the notice and which were, therefore, the primary persons who could make the application. Castlet argued that they were nevertheless a “person acting on their behalf” in this matter. The FTT rejected that argument. In this context, for a person to be “acting on behalf” of another, they should both be taking steps that the taxpayer or third party could take themselves and establish that they have authority to do so. In this case, there was no notification that Castlet had been appointed the representative of Nicholas nor was there any evidence that the legal advisers of Castlet were acting as representatives of Nicholas. As such, Castlet itself had no standing to bring the application.