Expats Take Poor HMRC Decision To Task In The Courts


Expat and non-resident taxpayers are queueing up to challenge the decisions of tax inspectors in court.

And the numbers revealed by HMRC are only the tip of the iceberg as many more will have complained and settled out of court, says new research.

In 2017, 122 taxpayers dragged HMRC before courts and tribunals seeking a judicial review of decisions they believed tax inspectors were wrong about.

That averages at least one case every working day of the year.

The number was a 36% increase on the 90 judicial reviews considered by the courts in 2016.


Legal challenges

The number of cases has increased year-on-year since 2014, when there were 43 judicial reviews, and 2015, when 76 went before the courts.

The figures come from a freedom of information request made by legal firm RPC, which represents taxpayers fighting against HMRC decisions.

The firm says the increasing number of legal challenges coincides with more aggressive tactics by HMRC, which has doubled the number of cases involving legal enforcement to chase down unpaid tax bills.

RPC also claims HMRC makes some decisions under stress from politicians to hit targets and increase tax revenues.

The most common trigger for a judicial review was an expat or non-resident claiming they lived beyond the reach of the UK tax authority.

Aggression and intransigence

The other main triggers for a legal challenge were HMRC retrospectively changing customs duty and cases where HMRC ignored published guidance to rules on residence and the national minimum wage.

RPC partner Adam Craggs said: “Increasing aggression and intransigence mean that judicial reviews are becoming far too common and are all too often the result of simple errors by HMRC and a dogged refusal to correct them.

“This substantial increase in judicial review challenges would suggest that taxpayers are not prepared to be treated unfairly by HMRC and are willing to challenge its decisions and seek redress from the High Court.”

“We have seen a number of cases in the last 12 months where HMRC has withdrawn its decision once it became apparent that our clients intended to issue judicial review proceedings. It is regrettable that taxpayers are forced to take such action before HMRC acknowledges its mistakes and does the right thing.”

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