Expert Witness Journal Issue 63 October 2025 - Flipbook - Page 59
Privilege in UK tax disputes:
Five questions answered
by Sarah Osprey, Zoe Andrews, Tanja Velling
included among documents provided to HMRC
in bulk following an information request, or if
an HMRC o昀케cer was accidentally copied into an
email with privileged advice, it should be possible
to salvage the situation. It is crucial to act quickly,
inform the recipient that LPP applies, and ask them
to delete (and not pass on) the material sent in error.
Of course, it would be better to prevent inadvertent
or accidental disclosures in the 昀椀rst place. Where
HMRC ask for all emails from a particular inbox, it is
advisable to review the emails 昀椀rst so any privileged
material (and material that should be withheld for
other reasons) can be removed.
HMRC cannot demand disclosure of documents
that are subject to legal professional privilege.
However, it is not uncommon for HMRC to ask for
them. Careful thought is required when assessing
if a document really is privileged (and so can be
withheld) and, if so, whether the bene昀椀ts of sharing
it with HMRC might outweigh the risks. In this post,
we address 昀椀ve common questions on privilege,
which follows on from the more general tips on
information requests that we previously shared1 part
of a series on tax disputes in the UK.2
First things 昀椀rst. Legal professional privilege (LPP)
protects a client’s con昀椀dential communications with
their lawyer made for the purpose of obtaining
legal advice. It can also protect con昀椀dential
communications with third parties (such as expert
witnesses) made for the purpose of preparing
litigation. LPP is a fundamental right that belongs to
the client; it prevents the protected communications
from being disclosed without the client’s consent.
It is also a notoriously di昀케cult area of law. Recent
trends have shown increasing scepticism from
HMRC and regulatory authorities regarding LPP.
When does LPP apply? Does copying a
lawyer make an email privileged?
No, copying a lawyer does not automatically make an
email privileged. The application of LPP depends on
the purpose and substance of the communication.
Merely copying a lawyer into emails about a
company directors’ travel arrangements would not
make those emails privileged. But the conclusion
would be di昀昀erent, if the lawyer was copied to advise
on how many days the director would be regarded
as having spent in the UK for tax purposes because
of those travel arrangements. Where a con昀椀dential
communication is for the purpose of getting legal
advice, it can attract LPP, whether it asks a speci昀椀c
legal question or sets out the factual background for
the advice.
Can HMRC ask for privileged documents?
HMRC can (and do from time to time) ask to see
documents that are privileged, but it is up to you
whether to provide those documents or not – you are
not obliged to do so. Sharing advice may be helpful
in resolving a dispute, but the consequences and
potential downsides need to be considered. If you
provide a piece of advice, privilege could be lost not
just in respect of that document, but also for related
documents (which may or may not be so “helpful” for
your position). “Cherry-picking” which privileged
documents you share is generally not allowed. And,
in a cross-border context, the implications for other
jurisdictions of sharing advice with HMRC would
need to be considered.
The same principles apply if you have a company
director who is a lawyer. Whether con昀椀dential
communications (including emails) with the lawyer/
company director are privileged will depend on the
purpose and substance of those communications.
Are you seeking legal advice? Or are you discussing
commercial issues in respect of the running of the
company?
Who is the “client” for LPP purposes?
What if privileged documents are leaked
or inadvertently provided?
Very broadly, only communications between a
lawyer and their “client” can be privileged during
an HMRC enquiry (there are exceptions to this if
litigation is reasonably in prospect, but that often
will not be the case until quite late in the enquiry
process, or until a closure notice has been issued).
It depends on the circumstances of the leak.
Privilege is inherently linked to (and dependant on)
con昀椀dentiality. If con昀椀dentiality is lost, privilege is
lost and cannot be regained. If the advice has been
posted on a public website and viewed by thousands
of people (think Panama Papers), there is no coming
back. But, if privileged advice was inadvertently
EXPERT WITNESS JOURNAL
Identifying the “client” can be one of the most
problematic elements of the test for LPP. The “client”
is restricted to those employees of a corporate who
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