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It appears that three UK High Court judges have been invested in controversial tax avoidance schemes challenged by the UK tax authority (HMRC).

The judges, who made the investments before their appointments, maintained their interests in the schemes after assuming their positions. Additionally, two other sitting High Court judges also invested in tax schemes, one of which, the Rushmore scheme, was blocked by the Labour government in 2009 and defined as “highly abusive” and “completely contrived.” Concerns have been raised regarding the disclosure of judicial interests and the absence of formal rules mandating judges to publicly or privately disclose their financial affairs.

These investments were made between 2003 and 2012, a period when the UK government was actively combating tax avoidance. The schemes in question involved tax credits designed to incentivize government-supported activities. However, HMRC and government officials deemed some of these schemes unacceptable and contested them in court.

The Financial Times discovered these investments by examining public information available in Companies House records. The UK does not impose systematic disclosure requirements on its judges. The UK Guide to Judicial Conduct only necessitates ad hoc disclosures if a judge perceives a conflict of interest or its appearance.

This revelation underscores the utmost importance of robust transparency regimes when it comes to financial flows and assets. Establishing publicly accessible registers of beneficial ownership is crucial in ensuring accountability and preventing situations where conflicts of interest can arise.

Transparency plays a pivotal role in maintaining public trust in public institutions and upholding the integrity of civil servants, including the members of the judiciary. It enables citizens to have confidence that judges are making impartial decisions without being influenced by personal financial interests.

As a result, in a democratic environment, limitations on transparency can have detrimental effects on both administrative and political accountability. The public's right to information about the financial interests of those in positions of power is a fundamental aspect of a healthy democracy, facilitating checks and balances and preventing abuses of power. See Diane Ring and Costantino Grasso ‘Beyond Bribery: Exploring the Intimate Interconnections between Corruption and Tax Crimes’, Law and Contemporary Problems, Issue 4, 2023.

This is why concerns arise from decisions such as the recent judgment of the European Court of Justice WM and Sovim SA v Luxembourg Business Registers. While the court acknowledged that public access to beneficial ownership registers promotes transparency, it also deemed that general public access to this information may be excessive. These concerns arise because limiting public access to these pieces of information may undermine the constant struggle for transparency and potentially hinder the fight against the most pervasive forms of economic crime. See Donato Vozza ‘EU Court Of Justice: Steps Backward in Preventing Tax Abuse and Money Laundering?’, (Corporate Crime Observatory, December 2022).

SOURCES Kadhim Shubber and Max Harlow, "High Court judges invested in tax avoidance schemes", The Financial Times, May 16, 2023

Neil Johnston, "Judge ruled on tax avoidance cases while investing in schemes herself", The Telegraph, May 16, 2023.


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