Unreasonably Limiting Recourse to the Courts? R (on the application of Haworth) v HMRC
| Published date | 01 November 2022 |
| Author | Michael Blackwell |
| Date | 01 November 2022 |
| DOI | http://doi.org/10.1111/1468-2230.12728 |
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Modern Law Review
DOI:10.1111/1468-2230.12728
Unreasonably Limiting Recourse to the Courts? R(on
the application of Haworth) vHMRC
Michael Blackwell∗
Follower notices,introduced in Finance Act 2014, can in certain avoidance situations be served
on a taxpayer by HMRC (the UK revenue authority) where HMRC is of the opinion that
the principles or reasoning of a decided case would deny the tax advantage in dispute. Such
a taxpayer,who per sists with the dispute, is then exposed to a tax-geared penalty of up to 50
percent and can be required to pay the tax in dispute before the litigation is determined. The
follower notice regime was considered by the UK Supreme Court in R (on the application of
Haworth) vHMRC. The Supreme Court judgment addresses fundamental issues concer ning
access to the courts, the doctrine of precedent and balancing taxpayer rights against the public
interest in the collection of taxes.
INTRODUCTION
Follower notices allow Her Majesty’s Revenue and Customs (HMRC),the UK
revenue authority, to deter taxpayers from pursuing arguments in litigation, in
avoidance situations, when, in litigation involving other taxpayers, those argu-
ments have not previously been successful and HMRC are of the opinion that
the principles or reasoning of the earlier case would apply to the later one.The
deterrent is, broadly speaking,1a penalty of up to 50 per cent of the tax in
dispute if the taxpayer pursues the litigation after a follower notice has been
served. Between 2015 and December 2020 HMRC issued around 22,000 fol-
lower notices. In R (on the application of Haworth) vHMRC2the Supreme Court
considered whether a restrictive reading should be given to the legislation re-
garding follower notices,in order to vindicate the constitutional right of access
∗Associate Professor of Tax Law, LSE Law School. The author wishes to thank the anonymous re-
viewer for their extremely helpful comments.All URLs last visited 24 January 2022.
1 Technically it is based on the ‘denied advantage’ not the ‘asserted advantage’, which may
be dierent. For a discussion of this, see HMRC, ‘Guidance Follower notices and ac-
celerated payments’ 1.14 Penalty - calculating the denied advantage (the penalty base)
at https://www.gov.uk/government/publications/follower-notices-and-accelerated-payments/
follower-notices-and-accelerated- payments.
2R (on the application of Haworth) vHMRC [2021] UKSC 25; [2021] 1 WLR 3521.
© 2022 The Authors. The Modern Law Review published by John Wiley & Sons Ltd on behalf of Modern Law Review Limited.
(2022)85(6) MLR 1562–1575
This is an open access article under the terms of the Creative Commons Attribution-NonCommercial-NoDerivs License,which per mits
use and distribution in any medium, provided the original work is properly cited,the use is non-commercial and no modications or
adaptations are made.
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