VVB Engineering Services Ltd (and Others) and Others v Commissioners for HM Revenue and Customs
| Jurisdiction | England & Wales |
| Judge | Mr Justice Supperstone |
| Judgment Date | 16 March 2017 |
| Neutral Citation | [2017] EWHC 506 (Admin) |
| Docket Number | Case No: CO/302/2016; CO/725/2016; CO/768/2016 |
| Court | Queen's Bench Division (Administrative Court) |
| Date | 16 March 2017 |
[2017] EWHC 506 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
The Honourable MR Justice Supperstone
Case No: CO/302/2016; CO/725/2016; CO/768/2016
The Queen on the applications of
Phillippa Kaufmann QC (instructed by Reynolds Porter Chamberlain LLP) for the Claimants
Gemma White QC (instructed by HMRC Solicitor's Office) for the Defendants
RULING ON PRELIMINARY ISSUES following the hearing on 25 January 2017
These cases are three of many judicial review claims challenging accelerated payment notices ("APNs") and partner payment notices ("PPNs") issued by HMRC to tax payers under Part 4, Chapter 3 and Schedule 32 of the Finance Act 2014 (" FA 2014").
On 9 November 2016 Cranston J ordered that the three sets of proceedings, including consideration of permission for judicial review, be stayed pending final determination of R (on the application of Rowe and others) v HMRC [2015] EWHC 2293 (Admin). The Claimants' grounds of claim are not materially different from those dismissed by Simler J in Rowe, which is presently on appeal to the Court of Appeal. The Claimants do not seek to vary that part of the order of Cranston J.
However they do apply to vary that part of the order of Cranston J by which he refused their application for interim relief in the form of an order preventing HMRC enforcing APNs pending final determination of their claim.
On 25 January 2017 I heard submissions from Ms Phillippa Kaufmann QC on behalf of the Claimants and Ms Gemma White QC on behalf of the Defendants. The hearing was adjourned. Pursuant to my directions I received a Reply in writing on 8 February from Ms Kaufmann and a Response to the Claimants' Reply from Ms White on 15 February.
At the conclusion of the hearing on 25 January I said that I would provide the parties with a summary of my conclusions in writing, which I now do, together with brief reasons.
Summary of conclusions
In my judgment:
i) the Claimants are not entitled to interim relief without conditions;
ii) interim relief is conditional on establishing hardship;
iii) the test for hardship is as set out by Sir Kenneth Parker in R (Vital Nut Co Ltd) v HMRC [2016] EWHC 1128 (Admin) at para 31.
iv) I am not satisfied on the evidence served by the Claimants to date that they would suffer hardship such as to justify the grant of interim relief in their favour.
v) The Claimants shall, if so advised, serve and file further evidence on which they wish to rely to establish hardship by 4pm on Friday 7 April 2017. They should then engage with the Defendants with a view to reaching agreement on interim relief. In the event that agreement cannot be reached these adjourned applications will be re-listed for a hearing at which the issue of interim relief will be determined.
Reasons
Issue [i]: whether the Claimants are entitled to interim relief without conditions
In support of her submission that interim relief should be granted without conditions Ms Kaufmann relied on the observations made by Charles J in Vital Nut [2016] EWHC 1797 (Admin) at paras 5–Charles J granted interim relief pending the appeal on the same terms as those in the order of Parker J. However he confessed to seeing "force" (para 8) in not imposing conditions, in particular because there is an additional factor which as far as he was aware did not exist in Rowe, namely that the Revenue failed to get on with having their point on statutory construction decided. Ms Kaufmann suggests that precisely the same circumstances that gave Charles J cause for concern arise in these claims. The Defendants should not be permitted to benefit from their own deleteriousness. Further, she submits, these cases differ from Vital Nut in an important respect, in that no interim relief has been granted to date so the court is free to determine the terms of an appropriate order untrammelled by any orders that previously have been made. Finally, Ms Kaufmann submits that the administrative burden that will flow from only allowing interim relief conditional on establishing hardship would be avoided by the grant of unconditional relief, with no resulting prejudice.
I reject these submissions. The central issue on this application is where the balance of convenience lies. As Simler J observed, when analysing the relevant provisions in FA 2014, in R (Rowe) v HMRC [2015] EWHC 2293 (Admin) at para 27:
"Anyone who enters into a tax avoidance scheme takes the risk that the scheme will fail and that ultimately the tax will be payable. The legislation accelerates the requirement to make the 'at risk' payment pending determination of the dispute but the risk was always there, and must have been anticipated."
Simler J continued at para 70:
"Parliament has enacted a statutory scheme intended to operate broadly across a wide range of tax avoidance schemes to remove the cash-flow advantage pending enquiry and appeal".
Information provided by the HMRC indicates that in the...
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