Adviser Business Solutions Limited & Ors, R (on the application of) v The Commissioners for HMRC

An accelerated payment notice is lawful where the designated officer has positively determined, on the available information and belief, the disputed tax required to counteract the denied tax advantage. A case involving an appeal against an existing tax determination is materially different from one involving an enquiry in which no concluded tax position has yet been formed.

A postponement agreement under section 55 of the Taxes Management Act 1970 cannot create a legitimate expectation inconsistent with the later statutory APN regime. Under the amended provision, an accelerated payment notice ends any existing postponement and makes the relevant tax payable.

The claimants, private companies involved in disclosed tax-avoidance arrangements, sought judicial review of accelerated payment notices issued under Part 4 of the Finance Act 2014 and Schedule 2 to the National Insurance Contributions Act 2015.

They argued that the notices were ultra vires because the designated officer had not made the statutory determination concerning the disputed tax. They also alleged that HMRC had created a legitimate expectation that payment would remain postponed pending appeals against PAYE determinations and NIC decisions.

The court considered whether either challenge was arguable in light of the existing determinations, the statutory postponement provisions and the APN regime.

1. Ultra vires challenge. Section 221(3) of the Finance Act 2014 requires the designated officer to determine, to the best of the officer’s information and belief, the amount required to counteract the denied advantage. The Court of Appeal’s reasoning in Rowe v HMRC [2017] EWCA Civ 2105 required a positive determination.
2. The present case differed materially from Vital Nut v HMRC [2016] 1797. In Vital Nut the notices were issued during an enquiry. Here HMRC had already issued regulation 80 PAYE determinations and NIC decisions, communicated its concluded view, and received appeals. The designated officer’s positive determination was therefore plainly made. The challenge was unarguable.
3. In any event, even if there had been a procedural defect, section 31(3D) of the Senior Courts Act 1981 required refusal of permission because it was highly likely that the outcome would have been the same. HMRC had already determined that tax was due, maintained that position after the appeals and issued the APNs against that background.
4. Legitimate expectation. HMRC had agreed to postpone collection under section 55 of the Taxes Management Act 1970. However, sections 55(8B)–(8D), inserted in connection with the APN regime, provided that an existing postponement ceased when an APN was given. Parliament had therefore made APNs prevail over postponement.
5. The reasoning in Dickinson v HMRC [2018] EWCA Civ 2798 confirmed that the statutory change could override an earlier postponement arrangement. The claimants’ expectation was inconsistent with primary legislation and was consequently unarguable. Permission was refused.

First-instance judicial review application. The judgment records earlier Court of Appeal decisions in related proceedings, including Rowe v HMRC [2017] EWCA Civ 2105 and Dickinson v HMRC [2018] EWCA Civ 2798, but this claim was not an appeal from those decisions.