R (Shiner and Another) v HM Revenue and Customs
| Jurisdiction | England & Wales |
| Judge | Lord Justice Waller,Lord Justice Rix,Lord Justice Wilson |
| Judgment Date | 26 May 2010 |
| Neutral Citation | [2010] EWCA Civ 558 |
| Date | 26 May 2010 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: C1/2009/1224 |
[2010] EWCA Civ 558
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION, ADMINISTRATIVE COURT
Lord Justice Stanley Burnton
Before: Lord Justice Waller
Vice-President of the Court of Appeal, Civil Division
Lord Justice Rix
and
Lord Justice Wilson
Case No: C1/2009/1224
CO/11073/2008
Mr David Goldberg QC and Mr Conrad McDonnell (instructed by PricewaterhouseCoopers Legal LLP) for the Appellants
Mr Rabinder Singh QC, Mr Ian Hutton and Mr James Rivett (instructed by HMRC Solicitor's Office) for the Respondents
Hearing date: 9 th March 2010
Lord Justice Waller:
On 20 th April 2005 the applicants set up settlements aimed at taking advantage of what was perceived to be a loophole in the double taxation agreement between the UK and the Isle of Man in relation to income earned by them as UK residents. The scheme involved trustees being partners in an Isle of Man partnership—the details do not matter at this stage. There could be an issue between the applicants and HMRC as to whether the scheme succeeded in avoiding tax, having regard to section 62 of the Finance (No 2) Act 1987 which became section 858 of the Income Tax (Trading and other Income) Act 2005. Section 58 of the Finance Act 2008 sought to put matters beyond doubt so far as future schemes were concerned but also purported to have retrospective effect.
By letters dated 18 th August 2008 HMRC wrote to a number of taxpayers, including the applicants, saying that the consequence of section 58 was that they would be chargeable to tax for every year in which income arose.
On 17 th November 2008 the applicants issued proceedings seeking judicial review of what they alleged was the “decision” of 18 th August 2008 to apply section 58 retrospectively. They sought declarations that the retrospective application of section 58 was incompatible with Article 56 of the EC Treaty (the EC point), and with Article 1 of the First Protocol to the ECHR (the Human Rights point). They also sought an order quashing HMRC's decision to enforce section 58 retrospectively as reflected in the letters of 18 th August 2008.
The application for Judicial Review came before Stanley Burnton LJ on 3 rd June 2009. He stayed the ECHR claim pending the outcome of a similar application in R (Huitson) v HMRC (“Huitson”) and considered the EC point. He decided that the applicants’ claim was in substance a challenge to section 58 itself and the letter of 18 th August 2008 was not a decision but was “doing no more than conveying to the taxpayers the effect of section 58” and dismissed the claim for being out of time. He also found that proceedings of this kind ought to be dealt with through the statutory appeals procedure under which the Tribunal (Tax Chamber)(“the Tax Tribunal”) could consider the EC point if it were a good one. He did not say that proceedings for Judicial Review were necessarily an abuse of process but, as a matter of discretion, he would have stayed the proceedings.
One distinction between the EC point and the ECHR point is that the Tax Tribunal would have had no jurisdiction to consider the ECHR point and that is an important distinction to have in mind, as will appear.
On 16 th June 2009 Stanley Burnton LJ granted permission to the applicants to bring Judicial Review on the ECHR point, and the applicants ultimately agreed to be bound by the decision in Huitson, at that time pending.
The applicants sought permission to appeal Stanley Burnton LJ's decision on the EC point,...
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R (Huitson) v HM Revenue and Customs
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R(Mr Ian Isaac Shiner and Another) v HM Revenue and Customs
...(14 July 2009) granted permission to bring judicial review proceedings based on Convention grounds. [15]By an order dated 26 May 2010 ([2010] EWCA Civ 558; [2010] BTC 615), this court (Waller, Rix and Wilson L JJ) granted permission to the claimants to apply for judicial review seeking a de......