Wilkinson, R (on the application of) v Inland Revenue

This appeal concerned whether the Commissioners of Inland Revenue could, under their care and management powers, grant widowers an allowance equivalent to the Widow's Bereavement Allowance (WBA) in order to avoid discrimination contrary to Article 14 taken with Article 1 of Protocol No 1 of the Convention. The court accepted that section 262 Income and Corporation Taxes Act 1988 (WBA) discriminated in favour of widows and that Moses J was correct to make a declaration of incompatibility under section 4 of the Human Rights Act 1998.

The key legal conclusions were: the Commissioners' statutory powers under section 1(1) of the Taxes Management Act 1970 (and related statutory duties) do permit managerial discretion to make limited extra-statutory concessions for good management, but they do not empower the Commissioners to contradict a clear and unequivocal intention of Parliament by granting concessions that negate primary legislation (here, to extend WBA to widowers). Section 3 of the Human Rights Act 1998 cannot be read to supply such a power. Section 6(2)(b) HRA does not excuse a public authority from a failure to exercise a discretionary power where the power can be exercised compatibly with Convention rights; it applies only where a statute authorises or requires acts which cannot be made Convention-compatible in any exercise. Finally, the Commissioners were not unfair or irrational in declining to settle Mr Wilkinson's claim on the same terms as earlier Strasbourg settlements, and just satisfaction did not require payment.

Background and procedural posture. Mr Wilkinson, a widower whose wife died on 23 June 1999, sought from the Inland Revenue an extra-statutory payment equivalent to the Widow's Bereavement Allowance (WBA) for the tax year to 5 April 2000. WBA had been provided for widows by section 262 Income and Corporation Taxes Act 1988 and was abolished prospectively for deaths on or after 6 April 2000 by section 34 Finance Act 1999. The Commissioners had settled a Strasbourg claim by Crossland (who was paid the equivalent sum by way of friendly settlement) but refused Mr Wilkinson's domestic claim. Moses J had declared section 262 ICTA incompatible with Convention rights and dismissed the remainder of Mr Wilkinson's challenge. The Commissioners appealed the aspects of Moses J's decision; Mr Wilkinson cross-appealed and sought a declaration that the Commissioners were obliged under section 6(1) HRA to exercise their powers to make a payment to him.

Nature of the application and relief sought. Mr Wilkinson applied for judicial review seeking an extra-statutory payment equivalent to WBA (a "widower's bereavement payment") and contended that the Commissioners were obliged under section 6(1) HRA to exercise their powers in his favour. The High Court (Moses J) made a declaration of incompatibility but refused the other relief; this appeal followed.

Issues framed by the court. The court addressed three principal issues: (i) the extent of the Commissioners' powers under section 1(1) Taxes Management Act 1970 and whether those powers permit extra-statutory concessions that contradict clear parliamentary intention (that WBA be restricted to women); (ii) whether section 6(2)(b) HRA excuses the Commissioners from failing to exercise any such discretionary power in favour of widowers; and (iii) whether the Commissioners' refusal to settle Mr Wilkinson privately, having settled Crossland, amounted to unfair or discriminatory treatment or an abuse of power.

Reasoning and conclusions. The court accepted that the Commissioners have managerial discretion to make concessions for good management of tax collection, as recognised in authorities such as R v Inland Revenue Commissioners, ex parte National Federation of Self-Employed and Small Businesses Ltd [1982] AC 617, but held that the Commissioners do not have power to refuse to collect taxes or to grant concessions that are aimed at contradicting an unequivocal intention of Parliament. The court relied on earlier authorities critical of extra-statutory concessions (Bates v IRC [1968] AC 483; Vestey cases [1979] Ch 177 and Ch 198) to conclude that section 1 TMA could not be read as authorising concessions that would nullify clear statutory entitlement. The court rejected the contention that section 3 HRA could be used to read the TMA so as to authorise such concessions. On s6(2)(b) the court held that it applies where a statutory power, however exercised, would inevitably be Convention-incompatible; it does not apply to justify a failure to exercise a discretionary power which could be exercised compatibly. Finally, on settlement and just satisfaction, the court held the Commissioners were not unfair or irrational in refusing to settle Mr Wilkinson in the same terms as Crossland and that awarding the payment would be an unjustified expansion of an anachronistic allowance; accordingly no compensatory payment was required.

The appeal is dismissed. The court upheld Moses J's declaration of incompatibility in respect of section 262 ICTA but concluded that the Commissioners did not possess statutory power to grant extra-statutory concessions that would contradict Parliament's clear intention to limit WBA to widows; section 3 HRA cannot be read to create such a power and section 6(2)(b) does not excuse a failure to exercise a discretionary power that could be used compatibly. The Commissioners were not unfair or irrational in declining to settle Mr Wilkinson's claim.

Appeal from the Administrative Court (Moses J) whose second judgment dated 14 February 2002 is reported as [2002] EWHC Admin 182; [2002] STC 347. This is the Court of Appeal determination of that appeal, neutral citation [2003] EWCA Civ 814.