Partner Article

What price confidentiality?

When you make a doctor’s appointment, what do you think about? You might be worried about your symptoms or frustrated that you can’t get an appointment at a convenient time, but it’s probably never crossed your mind that your medical details could find their way into the hands of the taxman.

For the patients of one doctor this almost became a reality.

Dr Long, who had a private practice, accidentally understated her income on her tax return. The amount was small - less than 4% of turnover - and as soon as it was discovered, she made a full disclosure.

She probably thought this was the end of the matter, but she was wrong. HMRC sent her a formal notice to produce information. One item demanded was her appointment diary as HMRC wanted to use this to compare turnover with patient appointments. Dr Long objected, as the diaries contained no financial information, but did include medical information. Understandably she was concerned that handing over the diaries would compromise patient confidentiality.

HMRC has the power to require taxpayers to produce documents ‘reasonably required for the purposes of checking a person’s tax position’, and challenging this means appealing to the tax tribunal. Fortunately for Dr Long, a tribunal found that HMRC had failed to make a case that the diaries would assist in reviewing her tax affairs, let alone that they were ‘reasonably required’.

The tribunal also considered the confidentiality issue, concluding:

‘Confidentiality is crucial not only to respect the sense of privacy of a patient but also to preserve his or her confidence in the medical profession and in the health services in general.’

In the end the right result was reached, but Dr Long shouldn’t have had to incur the stress of a tribunal hearing. It’s ironic that in order to protect patient confidentiality, she had to forgo confidentiality about her own tax affairs.

HMRC needs powers to investigate taxpayers who have evaded tax and sometimes diaries can play a role in this - more than one taxpayer has been caught claiming to be at a board meeting on a day when his diary showed he was sunning himself on the beach. But there has to be a balance between the power of the state and the rights of individual taxpayers.

Next time you are waiting in the surgery re-reading the magazines spare a thought for Dr Long.

This was posted in Bdaily's Members' News section by Baker Tilly .