Oculus Ltd v Commissioners for HMRC & Anor

Permission for judicial review may be granted on a narrowly arguable statutory ultra vires ground even where other challenges are barred by an alternative remedy or are unarguable. A power to specify the form and manner in which prescribed information is supplied does not necessarily authorise the public authority to require additional substantive information or warnings. Interim relief requires a serious issue to be tried and a favourable balance of convenience. Where the competing prejudice is at least evenly balanced, the status quo should ordinarily be maintained.

Oculus Ltd challenged HMRC’s issue of a Scheme Reference Number under the disclosure of tax avoidance schemes regime and sought interim relief preventing its operation. It also sought permission for judicial review on grounds concerning EU law, the Withdrawal Agreement, data protection, the right to silence and the statutory power to require circulation of HMRC’s AAG6 warning form.

The court refused permission on grounds 1 to 5. It granted permission on the statutory ground concerning whether the AAG6 contained information beyond that authorised by the Finance Act 2004 and the Tax Avoidance Schemes (Information) Regulations 2012. The central issue for interim relief was whether there was a serious issue to be tried and, if so, where the balance of convenience lay.

1. Judicial review permission. Permission was refused on grounds 1 to 5. Grounds 1 and 2 could have been pursued in GAL’s statutory appeal to the First-tier Tribunal, and seeking to relitigate them in judicial review was an abuse of process. In any event, those grounds were unarguable.

2. The post-IP-completion legislative changes could not be disapplied by EU law because section 5(1) of the European Union (Withdrawal) Act 2018 removed the principle of EU supremacy for enactments made after IP completion day. The free movement of capital argument also disclosed no discrimination or relevant interference and, in any event, the tax-compliance measures were justified and proportionate.

3. The right of establishment argument did not apply to an SRN issued to a United Kingdom company. The alleged GDPR breach was unarguable because the processing served legitimate tax-collection and compliance purposes and was not arguably disproportionate. Article 5 of the Withdrawal Agreement had no direct effect in United Kingdom law and the argument was parasitic on the unarguable earlier grounds. The right-to-silence argument also failed: the information sought was basic identifying information, the SRN was administrative rather than criminal, and penalties arose only for non-compliance.

4. Statutory ultra vires ground. The requirement in section 312ZA of the Finance Act 2004 concerned prescribed information, identified in regulation 6 of the Tax Avoidance Schemes (Information) Regulations 2012. It was arguable that HMRC’s power under section 316(1) to specify the form and manner of supplying that information did not extend to requiring additional warnings or other substantive material in the AAG6 form. Permission was granted on that ground, subject to particularisation of the wording challenged.

5. Oculus had sufficient interest to bring the statutory challenge. Although GAL and Umbrella Contracts Ltd were directly affected, they had not brought proceedings, and the legality of the AAG6 form raised an issue of wider public interest: Jones & Ors v The Commissioner of Police for the Metropolis.

6. Interim relief. Applying American Cyanamid Ltd v Ethicon Ltd, there was no serious issue to be tried on grounds 1 to 5. Ground 6 raised such an issue, but the balance of convenience did not favour relief. The AAG6 protected workers by warning them of HMRC’s concerns and possible consequences. The prejudice to workers from withholding it was at least equal to the prejudice to Oculus from sending it. The status quo was therefore maintained and the application for interim relief was dismissed.