More taxpayers take the taxman to Judicial Review

Judicial Reviews against HMRC now numbering in excess of 100 a year is down to an overzealous taxman and taxpayers standing up for themselves, a law firm says.   

Disclosing fresh figures for High Court actions against the Revenue by its customers, RPC showed that the department faced 122 JRs last year, up by more than a third from 90 in 2016.

The increase is a sign that, under pressure, HMRC is increasingly overstepping its authority, and acting unfairly towards taxpayers -- who aren’t prepared to take it, the firm said.

“Pressure to hit targets”, RPC says, “can lead to HMRC adopting a very dogmatic and aggressive approach which can leave it vulnerable to legal challenges by taxpayers.”

The analysis comes just 24 hours after the IHPA warned that HMRC is potentially leaving itself open to a pan-public sector legal challenge over its handling of last year’s IR35 reforms.

So the April 2017 framework could join issues like the sending of data request notices to taxpayers outside its jurisdiction -- an issue at the heart of a recent JR against the Revenue.

The department’s retrospective changes to the treatment of customs duty, and its disregard for its own published guidance on residence and the NMW, also inspired recent JRs.

“Taxpayers are not prepared to be treated unfairly by HMRC and are willing to challenge its decisions and seek redress from the High Court,” says RPC’s Adam Craggs.

“[The department’s] increasing aggression and intransigence mean that Judicial Reviews are becoming far too common and are all too often the result of simple errors by HMRC and a dogged refusal to correct them.”

RPC recommends taxpayers (with the help of advisers) consider whether it is appropriate to challenge HMRC using JRs, if they believe it has behaved unfairly or acted beyond its powers.

“We have seen a number of cases in the last 12 months where HMRC has withdrawn its decision once it became apparent that our clients intended to issue Judicial Review proceedings,” the firm said.

“It is regrettable that taxpayers are forced to take such action before HMRC acknowledges its mistakes and does the right thing.”