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R (on the application of Glenn & Co (Essex) Ltd) v HMRC [2010] EWHC 1469 (Admin)

16 May 2012   (0 Comments)
Posted by: SAIT Technical
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Introduction:

In a UK case, R (on the application of Glenn & Co (Essex) Ltd) v HMRC [2010] EWHC 1469 (Admin), the Administrative Court was asked to consider the legality of HMRC’s actions in removing computers from business premises.

Facts:

The taxpayer company dealt in excise goods and had been registered as a revenue trader. HMRC officers had entered the taxpayer’s business premises, unannounced, and without having obtained a warrant and stated that the purpose of the operation was to conduct interviews and to inspect business records including computers.

The officers disconnected and removed a computer server and desktop computers to interrogate their hard disks. The following day all but one of the computers were returned, with the remaining computer and server being returned on a later date.

Issue:

The taxpayer’s business premises was accessed, unannounced, and without having obtained a warrant for search and seizure.

The taxpayer challenged, by way of an application for judicial review, the legality of the officers’ conduct in removing the computers on the ground that s 118B of the UK Customs and Excise Management Act 1979 did not permit their removal because they were not documents as defined.

Decision:

The court noted that search and seizure, as envisaged in terms of s 118B, permitted ‘a substantial intrusion into the affairs of the persons against whom it may be invoked’ and there was, therefore, a particular need to ensure ‘that the provision is given no wider reading than Parliament must be taken to have intended’.

The court was of the view that, as a matter of first impression, the words contained in s 114(2) were sufficiently wide to extend the inspection power contained in s 118B to a computer, as a computer is a thing in which information is recorded.

While the taxpayer contended that a document was something tangible on which evidence or information is physically recorded and, by contrast, a computer is a piece of machinery comprising a number of features, operated by electricity and having a wide range of functions, the court dismissed the contention.

It is trite law that a computer hard disk was a single storage entity and was not just a container of files.

The court therefore concluded that the power of inspection did extend to the inspection of a computer.


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