Vision HR Solutions Limited, R (on the application of) v The Commissioners for HMRC

Permission for judicial review of HMRC’s proposed publication of information about suspected tax-avoidance arrangements requires a realistic prospect of success and no discretionary bar to relief. The statutory publication power in section 86 of the Finance Act 2022 serves the public interests of warning taxpayers and protecting tax revenues. It is not displaced by alleged retained free-movement rights or other EU-law arguments against later primary legislation. Publication is not, on the stated facts, a criminal charge or penalty under article 6 ECHR, nor an interference with a proprietary right in prospective customers or future business under A1P1. The claims were unarguable. Permission was refused, also because the claimants had failed to comply with their duty of candour.

Two companies supplying workers to UK employers challenged HMRC’s decision to list them under section 86 of the Finance Act 2022. HMRC suspected that their arrangements artificially separated remuneration into salary and purported option payments, with income tax and National Insurance contributions not deducted from the latter.

The claimants advanced arguments based on retained EU law, free movement of capital, the Withdrawal Agreement, data protection, A1P1 and article 6 ECHR. The data-protection ground was withdrawn. The court determined whether any ground had a realistic prospect of success sufficient to justify permission for judicial review.

1. Disposition. Permission to apply for judicial review was refused. The court held that none of the grounds had an arguable prospect of success. The claimants had also failed to comply with their duty of candour.
2. Section 86. Section 86 of the Finance Act 2022 empowers HMRC to publish information about suspected relevant proposals or arrangements for the purposes of informing taxpayers about risks or concerns and protecting the public revenue. Relevant arrangements are defined by section 234 of the Finance Act 2014. The statutory procedure includes prior notice and an opportunity to make representations, which HMRC had followed.
3. Free movement of capital. The EU Treaties ceased to be directly effective in UK law after Brexit. The repeal of the European Communities Act 1972 and the saving provisions in sections 1 to 6 of the European Union (Withdrawal) Act 2018 did not assist the claimants. In any event, even assuming that free movement of capital had been preserved, later primary legislation could not be declared invalid or disapplied for alleged incompatibility with discarded or retained EU law.
4. Section 86 would also have been lawful if the United Kingdom had remained an EU member. A proportionate and objectively justified warning about suspected tax avoidance, aimed at protecting taxpayers and tax revenues, did not confer an exemption from reasonable national action merely because it might discourage an exercise of free-movement rights.
5. The asserted right of establishment under article 25 of the Withdrawal Agreement did not affect HMRC’s power. The Maltese residence of a director and the location of principal companies were irrelevant: the listing applied neutrally to the UK agents and Maltese companies alike.
6. Human rights. Publication did not deprive the claimants of, or interfere with, proprietary know-how or a possession consisting of future customer income. Any interference would in any event have been proportionate, particularly given the public interest in informing taxpayers about tax risks. Publication was a warning mechanism, not punishment, and did not determine a criminal charge or impose a criminal penalty for article 6 purposes.
7. Under CPR rule 54.4, permission requires an arguable case with a realistic prospect of success and no discretionary bar to relief. Applying that test, the claims could not proceed.