A recent tax case should sound a warning bell for those in the habit of signing documents which may subsequently be amended. HM Revenue and Customs discovered that documents used in a tax avoidance scheme had been pre-signed by a participant. The documentation had taken several months to finalise, so a signature page was signed before the draft documentation was finalised and had subsequently been appended to the new documentation.
The court was unimpressed. In spite of the fact that the second set of documents accomplished the same thing as the drafts, the detailed terms of the agreements had changed. The final version of the documents was not executed by the signatory and therefore the documents were void.
Correct procedure is important when dealing with all legal documentation. ‘Pre-signing’ may also carry a risk of fraud. It is always advisable to make sure you have a contemporaneously created copy of documents you sign.
Partner Note
R (on the application of Mercury Tax Group Ltd. & Anor) v HMRC & Ors [2008] EWHC 2721.