The tribunal held there was a breach of the European Convention of Human Rights where businesses were required to submit VAT returns online, without appropriate exemptions for people who because of disability (or some other reasons) were unable to use a computer. The case seems relevant to whether people who stammer should be expected to use family or friends to speak for them.
First-tier Tribunal (Tax), 2013. Full decision in LH Bishop: www.bailii.org/uk/cases/UKFTT/TC/2013/TC02910.html
Facts in LH Bishop
From April 2010, businesses with a turnover of over £100,000, and any newly registered business, had to submit their VAT returns online if so notified by HMRC. Numerous businesses claimed that this was unlawful discrimination under Article 14 of the European Convention on Human Rights. (The position changed somewhat from April 2012: see below ‘Tribunal jurisdiction’.)
For some claimants the complaint was that the business owner could not use a computer because of a disability. One had severe destructive rheumatoid arthritis making keyboard use difficult, and very poor eyesight. Another claimant, with hydrocephalus would have needed a computer screen with a sufficiently high rate of cycles to not cause him a flicker problem, and in any event using a computer would probably cause him neck pain (paras 271-309 of the judgment).
There were limited exceptions in the regulations: for certain religious beliefs and for businesses in an insolvency procedure. HMRC also introduced a facility for businesses to submit their figures by telephone, but this was not publicised at all.
Tribunal decision in LH Bishop
The tribunal held there was unlawful discrimination under Article 14 of the European Convention of Human Rights on the grounds of disability, age, and computer illiteracy. There was also a breach of European Union law.
Grounds of discrimination
The tribunal decided that disability, age and computer illiteracy each fell within Article 14 as an “other status” (para 684-698).
Different ways of filing returns
The tribunal considered the different methods open to the disabled (or computer-illiterate) claimants to submit their VAT returns (para 533). It decided that all of them involved a breach of the claimants’ human rights . The different methods were either unjustified discrimination which was unlawful under Article 14 within the ambit of another Convention right, or they breached another Convention right without requiring Article 14:
- Having to use friends and family to file online returns on the business’ behalf, or to use the computer of a friend or family member, would be an unjustified breach of Article 8 (private and family life). Article 14 was not needed, but it was also a breach of Article 14 in conjunction with Article 8 (para 611-678, summary at 795-796). See further below My comment>Relevance to speech impairments: having someone else phone for you.
- If a business had to buy an online computer, this would be an unjustified breach of Article 1 Protocol 1 on the right to peaceful possession of property (para 564-610, 748, summary at 792-794).
- However, instead of buying a computer the business could employ an agent to do the VAT return. This would involve a cost and again fell within Article 1 Protocol 1 (peaceful possession of property). The requirement to pay for an agent was discriminatory and unjustified and so was a breach of Article 1 Protocol 1 and Article 14 (para 564-610, 748, summary at 802).
- Not relevant for the disabled claimants, but having to use the computer in a public library would be a breach of Article 14 combined with Article 8 (private life) since this option failed to accord elderly persons who needed to use this option the same right to confidentiality as others, and was unjustified (para 749-753, summary at 797-801).
- The tribunal held that HMRC could not rely on their unpublished and largely secret concession of phoning in one’s VAT figures as justification for failure to exempt disabled people etc from online filing. This was, partly because it was not a concession HMRC had power to give (para 477-521). Also, in deciding ‘justification’ under the Convention HMRC should not be allowed to rely on a concession kept secret from some of those it was intended to benefit, particularly when the purpose of keeping it secret was to compel the taxpayer to use other options if at all possible (para 770-772). Indeed the concession made it harder for HMRC to justify not providing an exception from online filing, because it showed HMRC considered a concession was needed (para 787).
More on discrimination
The tribunal held there was discrimination (para 755-759). For example the claimant with arthritis was too disabled to reliably use a computer to file his return. He would have to instruct an agent to do so, and so spend money. The disability discrimination was therefore within the ambit of his right to possessions under Article 1 Protocol 1.
The tribunal evidently considered it to be discrimination within the Thlimmenos case: ie when a State without an objective and reasonable justification fails to treat differently persons whose situations are significantly different. The tribunal had to consider whether the refusal to draw a distinction or grant an exemption from the general rule was justified (para 701-705), and held that it was not (para 760-789).
Company could claim if alter ego of an individual
It did not matter that two of the claimants were companies. The tribunal held the Convention properly gives human rights to companies which are the alter egos of their owners. Companies have a right to a private life within Article 8 where that private life is the private life of the alter ego of the company (para 539-563).
Tribunal jurisdiction: Le Bistingo case on position from April 2012
The LH Bishop case (above) considered the position that existed before April 2012, when a business only had to file VAT returns online if so notified by HMRC (called ‘first tranche’ businesses). The VAT Act said that a business could appeal to the tribunal about an HMRC “decision” on the application of the electronic filing regulations. The tribunal in LH Bishop therefore held it had jurisdiction to consider HMRC’s decision to notify, and to declare it unlawful as a breach of the European Convention on Human Rights.
However the legal position changed from April 2012. From that date the regulations simply imposed an obligation on virtually all VAT registered businesses to file online without any notification by HMRC, subject to limited exceptions (‘second tranche’ businesses). The First-tier Tribunal (Tax) considered the position on this in Le Bistingo v Commissioners of Revenue and Customs (bailii.org), 2013. The tribunal’s conclusion was that it did not have jurisdiction to consider whether this was unlawful discrimination under the Convention because there was no “decision” by HMRC, nor was there anything else in the regulations giving the tribunal jurisdiction.
The tribunal in Le Bistingo commented that technically a person in the claimant’s position “could seek to judicially review HMRC over the legality of the secondary legislation, [but] in practice the expense and difficulty of such a course of action to a person of small resources means that this is an unreal remedy.”
The tribunal decided “with a great deal of regret” that the only practical way the claimant would have of obtaining a judicial ruling on its grievance over the requirement that it must file online was to appeal any penalty imposed by HMRC if the claimant fails to comply with the law. But that was equally unsatisfactory as it requires the claimant to break the law in order to challenge it.
Tax dispute not within Article 6
The tribunal in Le Bistingo rejected an argument Article 6 of the European Convention, giving a right to a fair and public hearing, applied to second tranche businesses. Article 6 applies to “civil rights and obligations” and to any “criminal charge”. However the ECtHR in Ferrazzini v Italy (bailii.org), 2001, had held that tax disputes do not relate to “civil rights and obligations”, because tax is a public law matter. The tribunal in Le Bistingo said it was bound to apply this.
If it were not for the Ferrazzini case, the tribunal said it might have decided that s.3 Human Rights Act 1998 would require “decision” in the regulations on tribunal jurisdiction to be given a strained reading so as to allow the tribunal to decide the case.
Relevance to speech impairments: having someone else phone for you
Example: A bank insists on sorting out an issue by phone despite a person’s stammer. Particularly where an issue is complicated, or there is a lot of information to be communicated, the person may find this very difficult and it may simply impracticable. Say the bank argues it does not have to make alternative arrangments available (eg online secure messaging or face-to-face) because the person could have a family member or friend phone on their behalf.
The tribunal in LH Bishop held that having to use friends and family to file online returns on the business’ behalf, or to use the computer of a friend or family member, would be an unjustified breach of Article 8 (private and family life). It would also breach Article 14.
Paragraphs 658 to 665 of the decision in LH Bishop support an argument that – similarly – requiring someone to use family or friends to speak for them as in that example, at least on a financial matter, would be a breach of Article 8 (respect for private and family life) and also Article 14 (discrimination) unless justified. See the discussion of this at Human rights and provision of services>Offering an alternative to the telephone.
Reasonable adjustments to regulations
The case illustrates how a public body may effectively be required to make reasonable adjustments, even though its actions are required by regulations. HMRC and the government had a duty to take steps to make the VAT return filing system accessible for disabled people, unless it could justify not doing so.
It also illustrates though how in some cases there can be problems with jurisdiction of the particular tribunal.