Rettig Heating Group UK Ltd, R (on the application of) v The Commissioners for HMRC

In judicial review, disclosure is exceptional and is ordered only where it is necessary for the fair and just resolution of the issue. The duty of candour is primarily a duty of explanation. A public authority must identify the relevant facts and reasons underlying the challenged decision, but it need not disclose every internal discussion preceding that decision.

An inconsistency between a decision letter and later evidence does not automatically justify disclosure. The tribunal must examine the issues actually raised and whether the requested material is likely to be necessary to resolve them. A decision letter may, on the facts, be a complete expression of the authority’s reasons.

The claimant, a company in liquidation, brought judicial review challenging HMRC’s refusal to extend time under section 460 of the Corporation Tax Act 2009 for a claim to set off a non-trading loan relationship deficit against tax on overseas dividends.

The claim had permission in the Administrative Court and was transferred to the Upper Tribunal on 14 May 2024. Its substantive hearing was listed for February 2025. The claimant sought disclosure of HMRC’s internal discussions and communications leading to its decision letter of 5 January 2024.

It contended that apparent inconsistencies between that letter and the decision-maker’s later witness statement showed that further material was required. HMRC maintained that the letter stated the reasons for its decision and that disclosure was unnecessary. The central issue was whether the requested material was necessary for the fair and just determination of the pleaded judicial-review grounds.

1. The disclosure application was dismissed. The governing question was whether disclosure appeared necessary to resolve the relevant matter fairly and justly, under [2007] (HL(NI)) 1 AC 650. That inquiry is flexible and fact-sensitive. An apparent inconsistency or incompleteness in a public authority’s material does not itself require an order for disclosure.

2. The duty of candour requires a public authority to give full and accurate explanations of relevant facts and of the reasons underlying the challenged decision. It is a duty of explanation, which may be discharged by witness evidence, documents, or both. It does not generally require disclosure of every preliminary discussion or input into the decision-making process.

3. A written decision does not invariably and conclusively embody all reasons merely because it is a decision letter. The special treatment of decision letters in the planning context considered in [2023] EWHC 3255 (KB) depended on a statutory duty. Nevertheless, HMRC was entitled in this case to state in its grounds of resistance that its reasons were those in the letter of 5 January 2024.

4. For grounds concerning the test actually applied and whether an alternative condition in HMRC’s Statement of Practice had been considered, the letter itself gave the claimant a good prospect of establishing its case. Internal communications were not necessary to decide those matters. The remaining irrationality, error-of-law and relevant-considerations grounds principally concerned the legal relevance and effect of identified facts, not the decision-maker’s unrecorded deliberations.

5. The Tribunal refused the claimant’s request for disclosure. It stressed that the adequacy of a decision letter and the extent of the duty of candour remain matters to be assessed case by case.

• Upper Tribunal (Tax and Chancery Chamber): claimant’s interlocutory application for disclosure in its judicial-review claim was dismissed: [2024] UKUT 315 (TCC).
• Administrative Court: permission was granted for the judicial-review claim, which was transferred to the Upper Tribunal on 14 May 2024.