What is a Tax Judicial Review, and When Might You Need One?

Tax Judicial Reviews: What You Need to Know

A judicial review is the only really effective check on HMRC behaving badly. When is a judicial review appropriate in tax?

First, what is a tax judicial review?

A tax judicial review is a type of court proceeding in which a taxpayer asks the Administrative Court to set aside a decision or action taken by HMRC (or another public body) on the grounds that it has behaved either illegally, irrationally (i.e. very unreasonably), in serious breach of proper procedure or contrary to a taxpayer’s legitimate expectations (e.g. a failure to follow a promise made to the taxpayer).

An application for judicial review is brought under the Civil Procedure Rules and it begins with the taxpayer or his lawyer making a request to the court for permission to bring the claim for judicial review. The application must be made promptly and, in any event, within three months from the date the decision or event complained about occurred. There is a pre-action protocol which should be followed involving the sending of a standard letter to HMRC setting out the terms of the dispute (even though usually the details of the dispute will already be obvious to both sides in the previous correspondence) and giving HMRC 14 days to respond.

Technically, the legal proceedings are issued in the name of the Queen or “R” for Regina, on the application of the named taxpayer v HMRC because of the historical fiction that it is the monarch who is asking the court to supervise the behaviour of a public body such as HMRC. In practice however, the Crown has no involvement in the case.

When is a judicial review useful in tax?

In a judicial review, the court is able to set aside (quash) a decision of HMRC that has already been made, such as the issue of a taxpayer information notice or an accelerated payment or follower notice. This type of order is the most common order sought in judicial review proceedings against HMRC.

Other types of order that can be made against HMRC are an order prohibiting or preventing HMRC from doing something that it is about to do, or a mandatory order requiring an act to be performed, such as remaking a decision that has just been quashed in the same judicial review.

The court can also make a declaration which specifies the respective legal rights and obligations of the taxpayer and HMRC without it making an actual order. Less commonly used in judicial review proceedings involving HMRC is the court’s power to issue an injunction or award cash damages for a breach of statutory duty or of the taxpayer’s rights under the Human Rights Act 1998.

When not to use judicial review in tax?

Proceedings for judicial review should not be used where there is already an established appeal procedure available to the tax tribunal or some other judicial remedy exists. The judicial review procedure should be viewed as a last resort where no other realistic means of legal redress are available.

Based on recent cases, what are the chances of my tax judicial review succeeding?

The threshold in tax judicial reviews against HMRC in practice is very high, i.e. few cases succeed, even those that apparently “deserve” to succeed. The judges are keen not to fetter HMRC’s operational capacity to collect tax and allow it quite a wide margin in the sense that bad behaviour by HMRC towards a taxpayer will often be tolerated if there is a clear public interest or legal basis for the end result sought by HMRC. For example the judges are often willing to strongly criticize HMRC for conspicuous unfairness during a tax enquiry or investigation and yet still uphold its decision.

Some cases do however succeed, such as the quashing of HMRC search and seizure warrants that were obtained through the misleading of a Crown Court judge by HMRC in Hart & Others v HMRC [2017] EWHC 3091 (Admin) (in which I appeared jointly for the claimants). Another recent successful tax judicial review was R (on the application of Ames) v HMRC [2018] UKUT 190 TCC in which the Upper Tribunal quashed HMRC’s decision to refuse a late claim for tax relief as unreasonable in the circumstances of the case and remitted the taxpayer’s claim to HMRC for re-consideration by them.

However, most cases fail because of the difficulty of surmounting the high hurdle of showing that a decision of HMRC was an abuse of its powers in the sense that the decision was so unreasonable as to be treated as irrational.

A good example of this difficulty is the Court of Appeal’s decision in John Dickinson and Others v HMRC [2018] EWCA Civ 2798 which involved accelerated payment notices being issued by HMRC after they had expressly agreed to postpone the payment of the tax in dispute pending the taxpayers’ appeals to the tax tribunal. The taxpayers argued that it was an unlawful abuse of power for HMRC to go back on express promises HMRC had made to the taxpayers not to enforce payment of the tax in question.

The difficulty was that it was only after the agreements to postpone had been given that Parliament introduced accelerated payment notices and amended the rules governing postponement of tax to say that in appropriate cases the tax should be paid over to HMRC pending the outcome of the dispute. Although it was found that HMRC had acted in a manner that was conspicuously unfair, there had been no abuse of power by HMRC because of Parliament’s legislated policy of requiring the tax in dispute to sit in HMRC’s hands and not that of the taxpayers, until the dispute was resolved. This change in the rules, on balance, trumped the conspicuous unfairness of HMRC’s behaviour.


Each case must be viewed on its own facts. HMRC often falls well short of the mark in terms of the low quality of its decision making, inordinate delays, irrational and sometimes over-zealous behaviour and a lack of objectivity and these factors often lead taxpayers to consider seeking a judicial review.

However, before embarking on a judicial review, it is important to take legal advice from a lawyer experienced in bringing judicial review cases, who will give you a realistic opinion of the chances of your claim succeeding, even when there has been conspicuous unfairness. If you require advice and representation in a tax judicial review, use this link to instruct Patrick Cannon today.

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