Judicial Review is a type of court proceeding in which a judge reviews the lawfulness of a decision, action or failure made by a public body (such as HMRC). It is usually the last resort in challenging the taxman’s Decisions.
Judicial Reviews are a challenge to the way in which a decision has been made, rather than the merits of the conclusion itself. In other words, it is not really concerned with whether the conclusion is the right one. The courts will not overturn HMRC’s decisions on Judicial Review if the correct procedures were followed; even if the courts would have come to a different conclusion.
The courts expect Judicial Review to be a last resort and expect parties to use Alternative Dispute Resolutions first (e.g. discussion, HMRC complaints procedure, Internal Review, appeals to the Tax Tribunal, Revenue Adjudicator, Ombudsman). So Judicial Review may only be used where there are no alternative appeal routes available.
An application for Judicial Review must be filed no later than 3 months after the grounds to make the claim first arose.
Taxpayers can use Judicial Reviews to challenge statutes, assessments, determinations, notices, Information Notices, penalty determinations, and the failure by tax officers to act in accordance with previous advice or guidance, i.e: a breach of a person’s Legitimate Expectation.
A decision made by HMRC can be challenged on grounds of illegality (e.g. acting beyond the powers conferred by law), irrationality (e.g. acting so unreasonably that no other public body would act in the same way), and procedural impropriety (e.g. actual or apparent bias, refusal of the right to a fair hearing, general unfairness, and abuse of power).
A breach of a taxpayer’s Legitimate Expectation can amount to unreasonable behaviour and therefore be an abuse of power.
Applications have to be detailed in writing to the court. They may subsequently be “renewed” at an oral hearing if the paper application is unsuccessful. If permission is granted then the case is heard at a substantive hearing.
A successful Judicial Review claim means the public authority has to make a fresh decision, taking into consideration the views of the court. However, the new lawful decision could still be unfavourable.
The Upper Tribunal (of the Tax Tribunal) has jurisdiction to hear Judicial Review proceedings in cases where the High Court (in Scotland the Court of Session) transfers the proceedings to the UT and in cases where there is an application for Judicial Review lodged with the UT on a challenge to a First Tier Tribunal decision.
Judicial Review is generally considered to be cumbersome, complex, lengthy, expensive and uncertain. On the whole it has been the preserve of big business and the rich.
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