Judicial review applications against particular applications of the partnership payment notice regime introduced by the Finance Act 2014 are working their way through the courts. However, such applications do not have the effect of suspending the notices under challenge pending the determination of the judicial review. Therefore, without more, the Claimant in the judicial review application either has to pay the tax demanded under the notice or not pay and face the risk of significant penalties if the judicial review application ultimately proves to be unsuccessful. In principle, an interim injunction preventing HMRC from enforcing the notice under challenge would remove that issue.
An application for such an injunction was made in March in the case of Nigel Rowe and others v HMRC and was rejected by Simler J. A transcript of that decision is not available. However, a similar application was made in the case of Dunne and Gray v HMRC, and the decision of Mrs Justice Laing has been reported. Again, the application for an interim injunction was unsuccessful.
The Judge determined that the statutory scheme was exhaustive and unambiguous. The legislation imposes distinct and separate statutory duties on HMRC, and any interim injunction would directly interfere with the performance of those statutory duties. Additionally, there is a statutory right of appeal against the issue of any penalties. Overall, Parliament has provided that if a partnership payment notice is issued the taxpayer must decide, if they wish to seek to challenge the notice by judicial review proceedings, whether or not to pay the sum demanded or take their chances on the judicial review and in any statutory appeal against any penalty should the judicial review fail. Consequently the Judge doubted whether she had the power to grant an injunction but if she did have such a discretion, she would not exercise it to grant the relief sought. She described an argument that the choice facing the Claimant effectively rendered the judicial review application nugatory as “misconceived”.
So all now rests on the outcome of the judicial review applications themselves.
Eamonn Dunne and Vincent Gray v Revenue & Customs Commissioners [2015] EWHC 1204 (Admin) (currently only available from Lawtel, which requires a subscription)
