The Administrative Court has released a decision concerning a claim for judicial review challenging the legislation imposing a 45 percent tax on restitution interest.
This decision of Whipple J follows the hearing reported in Weekly Tax Matters on 5 February 2016. The Administrative Court has stayed the claim for judicial review (JR) pending the outcome of existing appeal proceedings in the First tier Tribunal (FTT) brought by other taxpayers against a withholding already made by HMRC. The decision is significant in that the Administrative Court considers the correct route for challenging the legislation contained at Part 8C of CTA 2010 is by way of an appeal to the FTT.
The Administrative Court’s decision echoes that of the High Court on 2 February 2016 when Henderson J refused a taxpayer’s application to amend their existing High Court claim in order to challenge the lawfulness of the new legislation. The High Court also considered that the FTT was the appropriate forum. Together these decisions have provided taxpayers with an early steer on where and when a challenge may be brought.
Whipple J made no order in respect of permission on the JR claim and dismissed applications for expedition and interim relief on the basis that those taxpayers who brought the JR claim had not (yet) suffered any withholding or assessment pursuant to Part 8C CTA 2010.
Reasons set out in the Administrative Court’s decision include:
The FTT appeal has a case management hearing listed for March 2016.
The above information will be relevant to all taxpayers with restitutionary claims against HMRC seeking the recovery of compound interest (whether direct tax or VAT).
KPMG has launched a state of the art digital platform that enhances your experience and provides improved access to our content and our people, whatever device you are on.