IDG47030 - Disclosing customer information for HMRC’s functions

In addition to disclosures of anonymous information (see IDG47020) HMRC may also disclose customer information (i.e. information which identifies a HMRC customer, or allows the recipient to deduce information about the identity of a customer) where such a disclosure is necessary for the purpose of HMRC functions.

How can I determine whether a disclosure is ‘necessary’ for HMRC’s functions?

Whether or not a disclosure is necessary can be a difficult judgement to make. If in doubt seek guidance from Information Strategy (see IDG90100).

Examples of necessary disclosures include:

• passing HMRC debt details to the Official Receiver in bankruptcy work
• providing the police with details of a forthcoming visit so they can assess the health and safety risk (see IDG33200),
• making inquiries about a HMRC customer with a third party (see IDG32000)
• carrying out distraint in a public place.

In these cases, the disclosure of identifiable personal details is directly necessary for the performance of HMRC’s functions.

What if there is more than one way to carry out HMRC’s function?

‘Necessary’ is not restricted solely to situations in which the only way to carry out a HMRC function is to make the disclosure. There can be situations where a number of ways forward may be available, some of which involve disclosure of customer information and some of which don’t.

For example, if by not making a disclosure HMRC were to be less effective in carrying out its own functions then the disclosure should be made. A situation like this might be where a tax enquiry could be concluded more quickly by revealing information obtained from a third party. We should not wait until forced to reveal this information, such as by an order in court proceedings, if by disclosing it earlier the HMRC customer is more likely to recognise and agree to their true tax liability. An early disclosure is more resource efficient for both HMRC and the customer.

Similar examples may apply where HMRC is seeking to be more effective, i.e. HMRC could carry out its functions without the disclosure, but by making the disclosure, those functions are carried out more effectively.

Proportionality (see IDG41400 and IDG41050) is a particular consideration here too. Consider the infringement of the individual customer’s rights to privacy against the necessity of the disclosure. Is the infringement necessary and proportionate to the objective being sought. Seek advice from Information Strategy if in doubt ( IDG90100).

How to make a lawful disclosure of customer information

It will be lawful to disclose customer information provided that:

• only the minimum level of information about the customer is disclosed to allow the function to be carried out, and
• the making of the disclosure is necessary (as described above) for the exercise of HMRC’s functions.

Common situations where a disclosure of customer information would not be lawful

Commonly we will come across situations where the function of HMRC can be carried out without making the disclosure, yet the disclosure would nonetheless bring broader benefits. An example here might be the provision of information about cash seizures to the police. Providing cash seizure information is not necessary for HMRC to carry out its functions, or to help progress particular cases, but it may help the wider fight against crime and so benefits would accrue to law enforcement (perhaps including HMRC) from the disclosure.

But for the disclosure of customer information this is not sufficient. There must be a more direct connection to HMRC’s functions. Therefore such disclosures cannot be made for the purposes of HMRC’s functions, but often there will be another lawful method of disclosure such as a legal gateway ( IDG44000) or public interest (see IDG46050).

Particular difficulties can occur where the functions of HMRC and another person or government department are closely tied together. Distinguishing whether disclosure supports HMRC’s functions, the other person’s functions, or indeed the functions of both, is problematic. Where disclosures in such situations are contemplated, further guidance should be sought first (see IDG90100).