R (on the application of Glenn & Co (Essex) Ltd) v HMRC  EWHC 1469 (Admin)
21 May 2012
Posted by: Stiaan Klue
In a UK case, R (on the application of Glenn & Co (Essex) Ltd) v HMRC  EWHC 1469 (Admin), the Administrative Court was asked to consider the legality of HMRC’s actions in removing computers from business premises.
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.
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.
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.