Nourish Training Limited, R (on the application of) v The Commissioners for HMRC

Interim relief restoring VAT registration pending an appeal to the First-tier Tribunal is exceptional. A serious issue to be tried is insufficient. The claimant must provide compelling evidence, establishing to a high degree of probability, that without relief its statutory appeal would become ineffective through insolvency before determination. It must also provide detailed evidence of attempts to obtain expedition and why those attempts failed.

The court must consider the strength of the underlying case, the public interest, and the wider legal framework. Where HMRC seeks to prevent substantial VAT losses and the underlying merits remain uncertain, the balance of convenience may strongly favour HMRC. The High Court may have jurisdiction to grant relief protecting Article 6 rights, but that jurisdiction will be exercised sparingly.

The claimant sought permission for judicial review of HMRC’s immediate cancellation of its VAT registration and an interim injunction restoring registration pending its appeal to the First-tier Tribunal (Tax). It argued that loss of registration would cause insolvency before the statutory appeal could be heard, thereby making its right of access to an effective tribunal illusory.

The merits of the VAT cancellation were for the FTT, which could consider all evidence and decide whether registration should be restored. The central questions were whether the High Court could grant interim relief to protect the claimant’s Article 6 rights, whether insolvency was sufficiently probable, whether the claimant had pursued expedition adequately, and where the balance of convenience lay.

1. Applications dismissed. The application for an interim injunction and the application for permission to seek judicial review were dismissed.
2. The court had jurisdiction under section 37 of the Senior Courts Act 1981 to grant an injunction in an appropriate case, including where relief was sought to prevent a breach of Article 6. The application should be assessed by substance rather than form. However, the merits of the VAT dispute belonged to the FTT.
3. The modified American Cyanamid approach applied. The court considered the strength of the underlying case, the public interest, and the wider legal framework. A realistic prospect of success before the FTT was not enough. Following ABC, an applicant had to show something of the character of abuse of power, impropriety or unfairness, or establish that refusal of relief would probably violate its Convention rights.
4. The claimant had shown a serious question to be tried, but not a strong case. The FTT would make its own decision on the evidence. The material relied on by HMRC indicated substantial alleged VAT losses and repeated concerns about suppliers connected with fraud. The claimant’s responses did not remove the force of those matters.
5. The claimant had not established by compelling evidence, or to a high degree of probability, that insolvency would occur on a sufficiently certain timetable to render the FTT appeal illusory. The evidence concerning customers, the GLAA licence and invoice-discounting facility was contingent. Much of the evidence consisted of assertion rather than independent expert analysis. The claimant had also failed to provide the required detailed evidence of failed attempts to secure expedition.
6. The balance of convenience favoured refusal. Significant weight was due to the public interest in preventing further tax losses. The applications were therefore dismissed.

Not stated in the judgment.