HMRC wins Fatca case over data confidentiality

The Information Commissioner’s Office (ICO) has not upheld a complaint against HM Revenue & Customs (HMRC) regarding the UK’s compliance with the US’s Foreign Account Tax Compliance Act (Fatca).

The claimant is a US-born British citizen known as ‘Jenny’, who legally challenged the legality of HMRC’s co-operation with the US tax authorities.

Under Fatca, foreign financial institutions are required to report information about any of their US clients to the country’s Internal Revenue Service (IRS).

But Jenny has argued the sharing of her data with the IRS without her consent is a breach of the EU’s General Data Protection Regulation (GDPR).

Transparency obligation

The ICO sided with HMRC, however, even though it highlighted some misgivings over transparency on the part of the taxman.

The commissioner said: “On the basis of the information we have considered, our view is that HMRC has complied with its data protection obligations in transferring [Jenny’s] personal data to the IRS, with one exception.

“We consider that HMRC may not have fully complied with its [GDPR] Art 14 transparency obligations.”

But the ICO continued: “Although HMRC may not have complied with all of its data protection obligations, having taken into account the circumstances of this case, we do not consider that it is necessary and proportionate to take any further regulatory action.”

Filippo Noseda, the Mischon de Reya lawyer leading Jenny’s case against HMRC, said there was extensive European case law that favoured Jenny’s argument, but the ICO “refused to discuss” it.

‘Policy input’

He told International Adviser: “We are disappointed with the decision, but hardly surprised.

“It has taken over six months for the ICO to decide, and a couple of weeks ago they told us that they were seeking a ‘policy input’. This is clearly reflected in the decision.”

But the case can be appealed.

Jenny told IA: “According to my legal team there are very good grounds for appealing the ICO decision.

“However, this is subject to raising sufficient funds. A legal challenge of this type requires an enormous amount of work and dealing with HMRC and the ICO, without going to court, is costing several hundred thousand pounds.”

Jenny said she was now crowdfunding to raise the money to cover the legal costs of her case.

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