Archer & Anor, R (on the application of) v HM Revenue and Customs

Judicial review is ordinarily a remedy of last resort where Parliament has created a statutory procedure intended to resolve the dispute. A taxpayer challenging an accelerated payment notice should generally use the representation procedure under section 222 of the Finance Act 2014 before issuing judicial review proceedings. The procedure is part of a composite process for determining the amount payable, and representations should be construed broadly. Exceptional cases may justify immediate judicial review. A costs decision based on prematurity and the exercise of discretion will not be disturbed where the judge applied that approach correctly.

The claimants challenged accelerated payment notices issued by HMRC in connection with a tax avoidance scheme. They issued judicial review proceedings on 28 November 2014 and made statutory representations under section 222 of the Finance Act 2014 on 17 December 2014. HMRC then withdrew Mrs Archer’s notice.

Master Gidden made no order for costs, holding that the judicial review claim had been premature because the statutory representations procedure had not been used before proceedings were issued. The claimants appealed that costs decision. The central issue was whether section 222 provided an adequate alternative remedy which should ordinarily have been exhausted first.

The appeal was dismissed. Master Gidden had not erred in making no order for costs.

1. Judicial review as a remedy of last resort. The section 222 procedure was an adequate alternative remedy. It formed an integral part of the statutory scheme for determining the sum payable under an accelerated payment notice. Until that process was complete, the amount payable remained liable to change. The taxpayer should therefore ordinarily await HMRC’s determination before seeking permission to apply for judicial review.
2. Scope and effect of section 222. HMRC was under a duty to consider representations and determine whether to confirm, amend or withdraw the notice. The provision should be construed broadly. Representations could address matters bearing on the amount payable, not merely arithmetical errors. Section 223 suspended the payment obligation pending determination and for the statutory period thereafter.
3. Relevant discretionary considerations. Requiring the statutory procedure to be used first avoided duplicated costs, prevented judicial review of reasoning which might quickly become stale, conserved judicial resources and respected Parliament’s chosen dispute-resolution process. The lack of independence, an immediate right of appeal or a fixed response period did not make the procedure inadequate.
4. Limits. The conclusion was expressed as a prima facie rule. Exceptional cases may justify immediate judicial review, including a serious abuse of power or an apparent failure to comply with statutory requirements. The court did not decide whether a taxpayer who never invokes section 222, or who issues protective proceedings and seeks a stay, thereby loses or preserves the right to judicial review.

The Master was entitled to treat the claim as premature and to make no order for costs.

The judgment itself records no earlier appellate decision in the present litigation. The appeal was from Master Gidden’s costs decision of 12 June 2017. The High Court dismissed the appeal and upheld the no-order-as-to-costs outcome.