A judicial review is a process whereby a court can consider the lawfulness of a decision made by a public body, such as HMRC. Concerning tax disputes, during a judicial review the High Court will review decisions made by HMRC to ensure that they acted lawfully and fairly BUT only to the extent permitted by the 3 “I’s” of judicial review:

• Illegality
• Irrationality
• Impropriety (natural justice/legitimate expectation)

A judicial review is only permitted where there is no alternative remedy (e.g. an appeal to the FTT). It is, therefore, the last resort, where there are no other realistic means of legal redress available.

If you decide to make a claim for judicial review you must apply to the High Court for permission within 90 days of the decision that is being challenged, so it is important to act promptly and not leave an application to the last minute. If permission is granted, then the matter may either settle between the parties or it will progress to a substantive hearing.

If the court concludes that there has been a breach of public law principles then it may issue a declaration as to the legal position and a number of remedies, such as:

• what HMRC should have done and must do to act in accordance with the law
• a mandatory order, requiring HMRC to do something, such as making a fresh decision
• a quashing order, such as cancelling the original HMRC decision
• an injunction, such as preventing HMRC enforcing a tax assessment

Judicial review is highly relevant to controlling HMRC’s decision making and discretionary powers, where there is no alternative statutory remedy, e.g.:

• relevant to a taxpayer’s reliance on HMRC’s published manuals, guidance and interpretation of legislation
• preventing HMRC resiling from non-statutory ruling letters
• preventing HMRC resiling from statutory ruling letters
• a challenge to information notices issued under Finance Act 2008, Schedule 36
• a challenge to search warrants issued during a criminal investigation (e.g. failure to comply with the requirements of the Police and Criminal Evidence Act 1984, and failure to make full and frank disclosure at the time of applying for the warrant)
• a challenge to decisions to issue Accelerated Payment Notices (APN) and Follower Notices (FN) under Finance Act 2014
• a challenge to retrospective legislation (e.g. taxation of Employee Benefit trust loans and FA 2020, loan charge legislation)

Human Rights law (under the Human Rights Act 1998) is relevant to:

• Deliberate penalties / HMRC bear the burden of proof / such penalties are criminal in nature, and Article 6 (fair hearing) of the European Convention on Human Rights (ECHR) is engaged
• Failure to correct penalties /HMRC bear burden of proof / criminal in nature
• Right to a fair hearing under Article 6 ECHR