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

The representations procedure under section 222 of the Finance Act 2014 is ordinarily the taxpayer’s primary recourse against an accelerated payment notice. The procedure should normally be exhausted before judicial review is commenced.

Section 222 is to receive a broad and non-technical construction. HMRC must give serious and careful consideration to representations about the statutory conditions or the amount demanded. Protective judicial review proceedings should not ordinarily be issued merely to guard against the time limit.

An accelerated payment notice is nevertheless final when issued and creates an immediate obligation, subject to the suspensory effect of section 222. A successful claimant may be denied costs where judicial review was commenced prematurely without using that procedure or complying properly with the pre-action protocol.

HMRC issued accelerated payment notices to Mrs Archer and her husband following their participation in disclosed tax-avoidance arrangements. Mrs Archer began judicial review proceedings before making representations under section 222 of the Finance Act 2014. HMRC subsequently withdrew her notice.

Master Gidden treated Mrs Archer as successful but made no order for costs because the proceedings had been premature. Green J dismissed her appeal in [2018] EWHC 695 (Admin). The central issue before the Court of Appeal was whether section 222 provided a suitable alternative means of redress which should ordinarily be exhausted before judicial review, and whether bypassing it justified the costs order.

1. The appeal was dismissed. Section 222 of the Finance Act 2014 generally provides a suitable alternative means of redress for a taxpayer dissatisfied with an accelerated payment notice. Parliament intended that procedure to be the taxpayer’s primary recourse and that it should ordinarily be exhausted before judicial review proceedings are commenced. This conclusion respects the established principle that judicial review is a remedy of last resort and avoids duplicated expenditure and unnecessary demands upon the Administrative Court: [2017] EWCA Civ 1716 applied.

2. Section 222 is integral to the statutory scheme. The taxpayer has 90 days to make representations. HMRC must consider them and may withdraw or amend the notice or confirm or vary the accelerated payment. While the procedure is under way, the obligation to pay is suspended. The absence of an immediate statutory appeal, a prescribed period for HMRC’s response or an independent decision-maker does not deprive the procedure of its suitability.

3. The strict judicial review time limit does not ordinarily justify precautionary proceedings followed by a stay. Where a taxpayer makes representations in good faith and HMRC responds more than three months after the notice, the court should ordinarily treat time as running from notification of the response. The taxpayer should normally seek HMRC’s agreement to that effect. Judicial review should be held in reserve and, if ultimately required, should focus on the notice as it stands after the section 222 process.

4. Section 222 must receive a broad and non-technical construction. Objections concerning the statutory conditions, the amount demanded and the connected position of participants in the same arrangements should be accommodated where reasonably possible. HMRC must give representations serious and careful consideration and deal in good faith with proper submissions. Some high-level public law challenges may fall outside the section, but none of the grounds advanced by Mrs Archer required immediate judicial review.

5. The original notice and the stated amount were final and conclusive when served and created immediate obligations, subject to section 222’s suspensory effect. The Court therefore declined to endorse the High Court’s description of the notice as provisional or inchoate, although that disagreement did not affect the result.

6. Mrs Archer’s liability was not legally inseparable from her husband’s. Her independent objections fell within section 222, and she should have used that procedure first. The Master was entitled to make no order for costs. He was also entitled to take account of the failure to make a serious attempt to comply with the judicial review pre-action protocol.

1. Court of Appeal (Civil Division): The appeal was dismissed by [2019] EWCA Civ 1021. The order making no provision for Mrs Archer’s judicial review costs was upheld.
2. High Court, Queen’s Bench Division: Green J dismissed Mrs Archer’s appeal from the costs decision in [2018] EWHC 695 (Admin).
3. Administrative Court: Master Gidden treated Mrs Archer as successful following HMRC’s withdrawal of her accelerated payment notice, but made no order as to costs because judicial review had been commenced prematurely.