In an earlier blog (‘Too many powers, too little oversight?’) I attempted to summarise the findings and recommendations of the House of Lords Economic Affairs Committee in its report into HMRC powers. Ultimately, the Committee issued concerns about the increased powers of HMRC and the lack of safeguards for affected taxpayers. On the 22^nd of January, the Government responded to the report, which has helpfully been summarised in a (non-paywalled) article in Tax Journal. In this blogpost, I just wish to focus on one part of the Government’s response.

Interestingly, the Government accepted the recommendation to increase awareness of the statutory review process, but rejected the rest of the recommendations from the Committee relating to ‘Taxpayer Safeguards and Access to Justice’. These were that there should be a right of appeal against all HMRC determinations and notices; there should be a right of appeal with any new power HMRC is granted; that penalties associated with GAAR and Follower Notices be abolished; that the First-tier Tribunal should have the power to consider judicial review cases; that naming and shaming should only be used where there has been non-compliance with the law. Many of the responses in relation to the particular recommendations essentially revolved around repeating the underlying purpose of the relevant regime or rule. For instance, in response to the recommendation of abolishing penalties for GAAR or Follower Notices, the Government wrote that those ‘regimes are designed to address protracted delays in finalising avoidance cases and give the taxpayer opportunities to settle their disputes without the application of penalties’.

In relation to the recommendation that judicial review of HMRC decisions should be permitted in the First-tier Tribunal meanwhile, the Government responded that:

 ‘Any change to the Judicial Review process would need to be led by the Ministry of Justice in consultation with the judiciary. This would fundamentally alter the nature and purpose of the First-tier Tribunal which is to make findings of fact in a relatively quick and inexpensive way.’

The question which follows from this is whether it would in fact ‘fundamentally alter the nature and purpose of the First-tier Tribunal. Undoubtedly the First-tier Tribunal is an decision-making body which is invested with the expertise to make determinations of fact. However, it is myopic to think that the Tribunal does not also engage itself in issues of public law. Indeed, as I stressed in an article in the British Tax Review last year, ‘Public law in the First-tier tribunal and the case for reform’, the First-tier Tribunal already deals, and is in fact tasked by statute, with deciding public law issues for instance of reasonableness, illegality, procedural impropriety, legitimate expectation and proportionality. Further, there would be serious practical advantages to formally extending jurisdiction to the First-tier Tribunal (for instance in terms of efficiency and costs)! To this end, it is misconceived to argue that extending jurisdiction would in any way alter the nature and purpose of the Tribunal – its nature and purpose has since its inception been to determine facts and public law issues.