Press Room

28 Mar 2024

The Curious Case of Webster v HMRC – Andrew Parkes


National Technical Director, Andrew Parkes, discusses Webster v HMRC – which centres on disclosure of bank account details by HMRC to the IRS – and how the case may be derailed due to its anonymous funders, in Taxation.

Andrew’s article was published in Taxation online on 25 March 2024, and in print on 28 March 2024.

Like many tax professionals, part of my lunchtime routine is to look at the recent decisions lists on bailii.org. (If you have not come across the British and Irish Legal Information Institute website, then I thoroughly recommend having a look around. I can’t fathom the search function, but it has all of the UK’s published tax cases).

Generally, I start with the obvious lists, such as the Supreme Court, Court of Appeal, Upper Tier Tribunal (Tax) and First Tier Tribunal (Tax), but it is also worth casting your eye over some of the other lists. These include the Administrative list, Chancery list and, in this case, the King’s Bench, as you never know what you might see, when it may be relevant, and when it is just plain interesting.

The case of Webster v Commissioners for His Majesty’s Revenue & Customs [2024] EWHC 530 (KB) released on 8 March 2024 is one such case.

Jennifer Webster appears to be a person who feels very strongly that the US Foreign Account Tax Compliance Act (FATCA) is a sledgehammer to crack a nut, and that the US Government cannot be trusted with such a weapon. She has been fighting her corner since at least 2019, and has a crowdfunding page, which she may need again.

That someone should take umbrage against FATCA or its non-US cousin, the Common Reporting Standard (CRS), is not particularly newsworthy or surprising. What has made this case of interest, however, is that Ms Webster’s legal fees are being paid by a mystery benefactor or benefactors, who are going to extraordinary lengths to avoid being named – slightly ironic given what FATCA and the CRS are trying to achieve.

The aims of the case are technically of interest to tax professionals, but let’s face it, the reason why we are now following this case is that we love a good mystery!

…they may take our lives, but they’ll never take our freedom!

How did we get here? The US, not unreasonably, got fed up with their citizens hiding money in banks and not telling the IRS about it. They came up with a novel approach: make foreign financial institutions tell the US about any US-owned money (and here we mean US citizen, not resident) on pain of suffering 30% withholding tax if they don’t.

This was a bit of an imposition, but then the rest of the world thought that the US had a good idea and thus the CRS was born. Now, if you have a bank account in a country where you are not tax resident, there is a pretty good chance that your home tax authority will be told that you have the account. As many of us know, where HMRC receive this information, but the UK person’s tax return does not show foreign income, a nudge letter is sure to follow.

Back to Ms Webster. In November 2019, she sent HMRC a pre-action letter regarding a proposed application for judicial review of HMRC’s refusal to agree not to share her information under FATCA.

HMRC responded within three weeks. The speedy response may be down to the fact that they decided it was somebody else’s problem, and Ms Webster had to take her complaint to the Information Commissioner first. It appears that on this point at least, they were correct, as Ms Webster’s complaint to the ICO is apparently proceeding.

Not letting HMRC off the hook though, Ms Webster then claimed that HMRC had breached the General Data Protection Regulation (the ‘GDPR’)/Data Protection Act 2018, the Human Rights Act 1998 and the EU Charter of Fundamental Rights and wanted the courts to state that HMRC’s actions under FATCA were unlawful.

In what might be considered a bit of an about-face, although possibly justified, HMRC now said that Ms Webster should have asked for a judicial review after all, but not against HMRC’s decision to refuse to exchange her information. HMRC suggested that the judicial review should instead have been against the inter-governmental agreement regarding FACTA and the UK Order in Council that brought it into force in the UK. Oh, and as luck would have it, she was now out of time to bring an application for judicial review.

Ms Webster continued with her claim. This is one of the areas that interests us as tax professionals, and it goes to the mechanics of the case. HMRC are asserting that Ms Webster’s case is not for her alone, but a matter of general public interest, and it always was, therefore she should seek a judicial review rather than a private claim. As she is asserted to be out of time to apply for a judicial review, she cannot circumvent the process by making the private claim. If HMRC are correct with this defence (and more on that below), this is something to be borne in mind if you want to challenge a decision by HMRC, whether it is via a private claim or a judicial review. It is important to get this right, as if you get it wrong, then you can lose on a technicality without your complaint or grievance being heard. In cases like this I do wonder if it is more important that Ms Webster is given a voice than that she wins (although obviously she will want to win).

No taxation without disclosure

To assist with their defence, HMRC asked for details of the person (or persons) who were funding Ms Webster (and this is the bit we came for) as part of “an international strategic data protection litigation campaign focusing on the implementation of various ‘transparency’ measures for individuals’ fundamental rights”.

Ms Webster declined on the basis that she did not know who they were and had no way of finding out. Her solicitors said that they were barred by privilege on what the judge called “a distinctly obscure basis” from providing details. One must admit, this too would be a good point to be argued or explained in more detail as what is and what is not legally privileged can have a huge effect for advisers and their clients.

However, she has been told to disclose who the funders are, and the recent decision seems to be the result of a Hail Mary pass to avoid doing so. Having been ordered to name the funders, she instead launched an attempt to get the parts of HMRC defence struck out that required her to disclose who the funders are. Like many such last-ditch attempts, this one failed. This is despite the Court being assured that the funders were:

  1. a group of companies within the same group under common control;
  2. an international business with significant philanthropic interests which believes in privacy and data protection. It is owned by a number of individuals, none of whom are subject to FATCA;
  3. not based in the United States nor owned by a US institution; and
  4. not, whether directly or indirectly, owned by any state or Government entity.

See you in Court, or maybe not

The Judge found that HMRC should be allowed to run their abuse of process defence and so Ms Webster should disclose her funders. Sadly for her, the comments in the judgement suggest that her funders will refuse and so her case may have to be abandoned. Unless her crowdfunding takes off, her complaint may not get its day in Court. She does still have her ICO claim though, unless that too requires anonymous funding.

There are some points in the case that are of general interest, beyond the attempt to get FATCA and CRS stopped, but the main reason people are now following the case – the identity of the funders – is likely to remain a mystery, and so the other points we are interested in may have to wait for another case.


Andrew Parkes

Andrew is a highly experienced international tax specialist who worked at a senior level in HMRC’s international teams for over 10 years. He has a wealth of experience and technical knowledge.

Email: Andrew Parkes