Retail tycoon Mike Ashley was “met with a complete stone wall” after requesting personal data related to a £13.6 million tax dispute from HMRC, the High Court has heard.
The Frasers Group founder is bringing legal action against the tax body over allegedly “extensive” breaches of data protection obligations.
HMRC is defending the claim, but accepts that it breached obligations to a smaller extent.
At a hearing on Monday, the High Court heard that in 2012, Mr Ashley sold multiple properties to special purpose vehicles owned by Sports Direct International for around £88.6 million.
HMRC subsequently opened an inquiry into his tax return and later issued a notice to Mr Ashley, claiming he owed an additional £13.6 million in tax.
This is not how a public authority should conduct itself when dealing with subject access requests made by citizens
Mr Ashley challenged the notice and it was withdrawn in October 2022.
Under data protection law, anyone can ask an organisation for a copy of the personal information it is using or storing on them, known as subject access requests.
In September 2022, Mr Ashley’s lawyers made a request, asking HMRC for his personal data in connection to the inquiry.
The High Court in London was told by the businessman’s barrister that the tax body “wrongfully withheld a very considerable amount of data on the basis that it does not amount to Mr Ashley’s personal data”.
Anya Proops KC continued in written submissions: “Mr Ashley sought to exercise his right of subject access in order to access information which would help him better understand how these significant decisions concerning his personal property and his personal tax liability came to be taken.”
She added: “In effect, the subject access request had been met with a complete stone wall. Despite the fact that HMRC was inevitably processing very extensive personal data concerning Mr Ashley in connection with the inquiry, not a single iota of data was disclosed to him.”
The barrister later said that HMRC provided some data 17 months after the request was made, and a month after the legal action was filed.
Mr Ashley, whose lawyers told the court that HMRC is still breaching its obligations over some of the data, is seeking a declaration in his favour, the outstanding data and his legal fees.
“This is not how a public authority should conduct itself when dealing with subject access requests made by citizens,” Ms Proops concluded.
Having approached the matter correctly by first identifying what is actually Mr Ashley’s personal data, HMRC has relied on exemptions in relation to only a limited amount of Mr Ashley’s personal data
James Cornwell, for HMRC, said the tax body “frankly accepts” that it previously failed to comply with obligations.
“HMRC, has, however, since actively sought, in good faith, to rectify that default, at the further expenditure of very considerable time and effort,” Mr Cornwell said in written submissions.
He later told the court that Mr Ashley has “sought to adopt an unjustifiably broad interpretation of his personal data” from the start of the request.
The barrister said that HMRC was right to find that the data related to the values of the properties sold by Mr Ashley was not under the scope of the subject access request.
He said: “Data relating to HMRC’s valuation of properties sold by Mr Ashley do not thereby amount to Mr Ashley’s personal data, although such data may contain his personal data, properly understood and HMRC has identified and disclosed those.”
Mr Cornwell added that even if the tax body was wrong on that point, additional searches would have gone “beyond what was reasonable and proportionate” with more than 150 hours of work already done.
He concluded: “Having approached the matter correctly by first identifying what is actually Mr Ashley’s personal data, HMRC has relied on exemptions in relation to only a limited amount of Mr Ashley’s personal data.”
In a statement after Monday’s hearing, an HMRC spokesperson said: “We’ve fully complied with Mr Ashley’s subject access request and there is no further personal data to provide.”
The hearing before Mrs Justice Heather Williams is due to conclude on Tuesday with a decision expected in writing at a later date.
