Tax

Are tribunals required to consider public law challenges?

13 February 2026 by Guest Contributor

The post below was originally published on the Administrative Court Blog, of which its author, Dr Lewis Graham, is an editor. It is republished here with the Dr Graham’s permission.

The First-tier Tribunal had delivered a ruling in which it has allowed a claimant to challenge the imposition of a liability order on public law grounds, despite the jurisdiction for this not being set out explicitly in the relevant statute. The decision does not set a precedent, and strictly involves a narrow point of construction relating to the Finance Act. However, its reasoning, if approved or adopted on appeal, may have significant ramifications for claimants wishing to rely on public law grounds before tribunal appeals more generally. The case is Hall v HMRC [2026] UKFTT 124 (TC) (13 January 2026).

The claimant, Hall, was issued a Joint and Several Liability Notice (JSLN) and sought to appeal it before the First-tier Tribunal (FTT). He wished to challenge the notice on five grounds. It was undisputed that the tribunal had jurisdiction to consider the first two grounds (whether the prerequisite conditions were met, and whether the notice was necessary for the protection of revenue, respectively). However, HMRC disputed the tribunal’s jurisdiction to consider Grounds 3 to 5 (relating to the proportionality of the measure, the rationality of the measure, and a failure to follow relevant guidance) and applied for these grounds to be struck out, under rule 8(2) Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009. The question for the tribunal was, therefore, whether it did have the jurisdiction to consider these – public law – grounds.

Because the tribunal has no inherent public law jurisdiction, it can only be granted the ability to review such grounds by statute: see [65]. This in turn raises an issue of statutory construction. In this case, the jurisdiction of the tribunal when considering appeals to the issuing of a JSLN is set out in paragraph 14(1) of Schedule 13 to the Finance Act 2020. That section says that on appeal, the tribunal “must set aside the notice” if “any of the relevant conditions were not met when the notice was given” (para 4(1)(a)(i)), “it is not necessary for the protection of the revenue for the notice to continue to have effect” (para 4(1)(a)(ii)) or “the amount specified is incorrect” (para 4(1)(b)). If these grounds are not made out, “the tribunal must uphold the notice” (para 4(1)(c)). HMRC argued that the effect of these provisions was to exclude any public law challenge: [32], and that public law grounds could only be argued in a judicial review, rather than statutory appeal: [33].

The tribunal judge was unconvinced by this argument. She said that she could “see no language” in the statute “which precludes an assessment of proportionality or rationality when determining whether the Appellant has made out its defensive case”: [81]. Thus, the third and fourth ground of appeal could be considered by the tribunal. Although it was not confirmed, this, presumably, also meant that the statute did not preclude consideration of the fifth ground – whether HMRC failed to comply with its policies.

At first blush, it seems that the judge arrived at this interpretation via ordinary methods of construction. But the judge preceded her analysis with an overview of the interpretive powers available to her under section 3 of the HRA (see [60]):

“Where a Convention right is impermissibly limited by the terms of the statutory language chosen by Parliament the relevant provision should be construed so far as is possible to ensure a Convention compliant outcome… the line between a section 4 HRA declaration of incompatibility… and conforming interpretation [is] the “grain of the legislation”. Legislation need not be ambiguous in order for it to be interpreted expansively so as to protect Convention rights, an interpreting court or tribunal can read words in and change the meaning of the language used but cannot cross the constitutional line of legislating, in particular when choosing between alternative means of achieving a Convention-compliant meaning.”

The judge also followed her conclusion with the observation that the wider construction she adopted “also meets the Article 6 requirement that there be a forum with full jurisdiction on all matters of fact and law when considering the issue of the JSLN” and that “separating the issues between the administrative court and the Tribunal would run the risk of facts being evaluated differently and thereby inhibiting a fair trial”: [83]. Therefore, it appears that the judge’s conclusion was either made pursuant to, or reinforced by, the need to adopt a Convention-compliant interpretation under section 3 HRA.

Comment

With respect to the tribunal judge, her reasoning on the construction issue is a little thin and a number of issues in the judgment remain open to debate.

First, it is, as above, unclear whether section 3 was even applied in the first place. In some other cases, a similar result has been achieved by applying a presumption that a claimant “should be entitled to defend himself by challenging the validity of… the decision… on public law grounds” in order to uphold “the rule of law” (see KSM Henryk Zeman SP ZOO v HMRC [2021] UKUT 182 (TCC) at [34]). This was not the case here; as noted above, the interpretation appears to be based on section 3 HRA. But notably absent from the judgment is any discussion as to whether a Convention-compliant interpretation would fall foul of what is “possible” – whether recognising the jurisdiction of the tribunal to consider public law grounds would go “against the grain” of the legislation.

Second, it is not immediately clear that Article 6 requires that the tribunal act as a forum for the determination of Convention rights (as opposed to, say, the Administrative Court). All we are told is that there is an “Article 6 requirement that there be a forum with full jurisdiction on all matters of fact and law” ([83]). It is true that the Article 6 authorities (see e.g. Schmautzer v Austria (1995), paras 34-37) speak of the need for a “judicial body that has full jurisdiction” in the context of determining the validity of a criminal charge (the tribunal had already determined that the issuing of a JSLN was a criminal charge: [75]). However, in a number of different areas the Strasbourg Court has accepted that a tribunal or court exercising more limited powers of appeal or review has satisfied the requirements of Article 6 (see e.g. Stefan v UK (1997); Ali v UK (2016)). The Strasbourg case law in this area is hardly straightforward and it was surprising to see that the judgment didn’t feature any engagement with the key authorities on this matter.

Third, it is unclear why the judge insisted that the First-tier Tribunal ought to be imbued with full jurisdiction (see, mutatis mutandis, Mattu v the University Hospitals of Coventry and Warwickshire NHS Trust [2012] EWCA Civ 641 at [120]-[122]) Firstly, the claimant can appeal to a court which itself holds full jurisdiction (something which the Strasbourg Court has found to be relevant when assessing compliance with Article 6: see McMichael v UK (1995)). Secondly, the claimant can lodge a judicial review before the Administrative Court, which also holds full jurisdiction: see Runa Begum v London Borough of Tower Hamlets [2003] UKHL 5.

Fourth, Article 6 is – it seems – invoked in order to justify the recognition of the tribunal’s jurisdiction in relation to not only the consideration of Convention grounds, but two further public law grounds. Does the Convention really operate so as to require the tribunal – rather than another court – to determine rationality (and consistency with policy) alongside the determination of Convention rights?

As suggested above, the decision, being one of the First-tier Tribunal, does not formally set a precedent and does not bind other tribunal judges. Further, the case is, strictly speaking, concerned only with the interpretation of paragraph 14 of Schedule 13 to the Finance Act 2020, and not with wider issues relating to the jurisdiction of tribunals more generally. Nevertheless, the wide interpretation of both the requirements of Article 6 ECHR and the scope of section 3 HRA will no doubt make it more likely that similar challenges will arise in the future, in relation to other tribunal actions limited by statute. Whether the decision will survive appeal, and review by later judges, is less certain.

Dr Lewis Graham is a Lecturer in Human Rights Law at the University of Manchester

Schooled on tax and Human Rights: Government successful in private schools VAT challenge

18 June 2025 by Rosalind English

In ALR and others v Chancellor of the Exchequer [2025] EWHC 1467 (Admin), the High Court has dismissed a challenge against the government’s manifesto policy of adding VAT to private school fees. The claimants were a group of students, parents, and schools. Some of the students required specific schooling because of (inter alia) special educational needs and religious convictions; all claimants sought a declaration that the VAT addition was incompatible with the European Convention of Human Rights. Specifically, they argued that imposing VAT was incompatible with Article 2 Protocol 1 (right to education) and 14 (protection from discrimination).

This dismissal of the judicial review challenge represents a significant ruling on the interplay between fiscal policy, human rights law and the allocation of resources for education.

Child Tax Credit: Two-Child Limit and the Limits of Review

16 July 2021 by Guest Contributor

SC, CB and 8 children, R. (on the application of) v Secretary of State for Work and Pensions & Ors [2021] UKSC 26 (9 July 2021)

The Supreme Court has rejected a challenge against the two-child limit on the individual element of child tax credit payments. In a unanimous judgment delivered by Lord Reed, the Court held that the provision imposing the limit was not contrary to the appellants’ Convention rights.

The Court found that the rule was potentially indirectly discriminatory against women, as well as children living in households with more than two children. However, any such discrimination could be validly justified and was considered to be proportionate on the basis of ‘protecting the economic well-being of the country’. 

Background

Child tax credit is a welfare benefit scheme designed to provide financial support to families with children. The individual element of child tax credit, which is the subject of this case, entitles an individual to £2,830 per annum in respect of each child they are responsible for. 

In 2015, the Conservative Party announced as part of that year’s General Election manifesto that they intended to limit a person’s entitlement to child tax credit to just two children, unless one of a narrow range of prescribed exceptions applied. This was part of a wider policy pledge to substantially reduce the amount spent on welfare benefits. 

In March 2016, a bill was passed to that effect, and the limit came into force in April 2017. 

Loss from unlawful governmental action: the counterfactual?

11 March 2020 by David Hart KC

Vodafone et al v. Ofcom [2020] EWCA Civ 183

Ofcom make some unlawful regulations in 2015, under which telecom companies have to pay higher fees. The regulations were quashed in 2017. Four telecom companies want restitutionary damages, being the difference between the sums paid under the 2015 regulations and the sums they would have paid under their predecessors, the 2011 regulations.

Big money washing around: the claim was for over £200m.

Ofcom says – no, you are only entitled to the difference between the 2015 payments and the hypothetical fees which we could lawfully have charged had we done our job properly in 2017.

Sounds quite simple, but the answer goes deep into the intersection between public and private law.

The claim, as I have said, was restitutionary.

Ofcom said that the law of restitution is rooted in the private law of obligations. The private law approach (as with any tort claim) is to apply a “but for” test – what would the telecoms have paid but for the unlawfulness? This involves the counterfactual: what lawful fees could Ofcom have imposed?

The telecoms, and the Court of Appeal, disagreed. Ofcom’s argument offended the principles of legality, and parity (the principle that those who pay voluntarily should not be worse off compared to those who refuse to pay and litigate).

Law Pod UK Ep. 93: Taxation and Human Rights

23 September 2019 by Emma-Louise Fenelon

In Episode 93, Emma-Louise Fenelon speaks to Isabel McArdle about the ways in which taxation and human rights overlap, with a particular focus on how this has arisen domestically in relation to the licensing of wholesale alcohol trading.

Consultation duty gets to the Supreme Court

29 October 2014 by David Hart KC

Moseley R (ota) v. London Borough of Haringey [2014] UK 56  – read judgment

Lord Wilson posed the question, answered today by the Supreme Court, with concision. When Parliament requires a local authority to consult interested persons before making a decision which would potentially affect all of its inhabitants, what are the ingredients of the requisite consultation?

The judgments reveal the surprising fact that the core principles of consultation (named after Gunning, as public lawyers will know) have never been approved by the Supreme Court or its predecessor, the House of Lords. The Court was happy to endorse them as embodiments of fairness. But it went on to consider the duty to consult on rejected alternatives – as very recently debated by the Court of Appeal in the Rusal case – see my post here.

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Strasbourg’s €1.8bn award against Russia – and an arbitral award for $50 bn

7 August 2014 by David Hart KC

Oao  Neftyanay Kopaniya Yukos v Russia 31 July 2014 read this damages judgment and read violation judgment 

A good week, to say the least, for Mikhail Kordokovsky, recently released from a Russian jail. A complex story of punitive tax assessments on his former company, Yukos, has led to a judgement of €1.866 bn in Strasbourg against Russia.

I shall concentrate on the Strasbourg case, although for sheer numbers the story is perhaps elsewhere; on 28 July 2014 shareholders had obtained awards from the Permanent Court of Arbitration in The Hague ordering Russia to pay $51.57 bn to shareholders in Yukos Oil, saying officials had manipulated the legal system to bankrupt the company.

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The Tory human rights “car crash”

17 July 2014 by Adam Wagner

Imagine you are on the board of large corporation. You attend the Annual General Meeting and asked the chief executive about that controversial tax avoidance scheme the company had been considering, but which the in-house legal team had advised against. The Chief Exec smiles and says that has been dealt with: “we just sacked the lawyers”. 

The BBC is reporting what many suspected. Attorney General Dominic Grieve QC was sacked in order to clear the path for major reform of the relationship between the UK and the European Court of Human Rights. This is bad news, for the UK and potentially for the European Court of Human Rights too.

The Attorney General’s advice, which has been leaked to the BBC, was that plan to limit the power of the European Court of Human Rights were “incoherent” and a “legal car crash… with a built-in time delay“. Intriguingly, the BBC’s Nick Robinson also reports that William Hague, the now-former Foreign Secretary, also raised doubts over the plans.

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Eastenders in Supreme Court: A1P1 filling in the gaps

15 May 2014 by David Hart KC

Barnes v. The Eastenders Group [2014] UKSC 26 read judgment

Not Albert Square, but it could be. The Crown Prosecution Service suspect two individuals of a massive duty/VAT fraud in their cash and carry businesses. The CPS go to the Crown Court (in the absence of the individuals) and get an order to appoint a receiver (i.e. a paid manager) to run the affairs of companies (Eastenders) in which the individuals are involved, as well as a restraint order against the individuals. Both receivership and restraint orders are set aside some months later by the Court of Appeal, on the basis that the HMRC investigator’s statements were largely “broad and unsupported assertions”. Problem: by then the receiver had run up £772,547 in fees.

Simple issue. Who bears those fees? The receiver, the CPS or the companies against whom the order was made? And A1P1 (the right to possessions) made the difference.

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Tax avoiders don’t have human rights – Philippa Whipple QC

6 November 2013 by Guest Contributor

R (on the application of Ingenious Media Holdings plc and Patrick McKenna v Her Majesty’s Revenue and Customs [2013] EWHC 3258 (Admin) –  read judgment 

Sales J has rejected an application for judicial review by Ingenious Media Holdings plc and Patrick McKenna, who complained that senior officials in HMRC had identified them in “off the record” briefings.

Ingenious Media is an investment and advisory group which promotes film investment schemes which allow participators to take advantage of certain tax reliefs and exemptions.  HMRC has long been fighting to close down these “film schemes”, with some success (see the Eclipse 35 appeal).
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UK Uncut loses: Taxman’s Goldman Sachs deal “not a glorious episode”, but lawful

22 May 2013 by Alasdair Henderson

UK Uncut Legal Action Ltd v. (1) Commissioners of Her Majesty’s Revenue and Customs (HMRC) and (2) Goldman Sachs – read judgment

Tax avoidance has hit the news again, with Apple currently facing questions from the US Senate about its exploitation of Irish company law loopholes and David Cameron writing to offshore tax havens to push for more transparency over tax rules. As it happens, the High Court has just handed down a ruling in a case which raises many of the same issues.

The campaign group UK Uncut brought a judicial review claim against HMRC. They argued that it was unlawful for HMRC to reach a confidential settlement in 2010 with the investment bank Goldman Sachs over a multi-million pound unpaid tax bill arising out of a failed tax avoidance scheme. Mr Justice Nicol held that HMRC’s decision was not unlawful, but criticised the actions of HMRC officials and HMRC have acknowledged that the manner in which the settlement was agreed involved several mistakes.

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Strasbourg rules that excessive tax rates offend A1P1

16 May 2013 by David Hart KC

N.K.M v. Hungary, ECtHR, 14 May 2013, read judgment

Those of a certain age will remember when top tax rates in the UK were 98%. This was the marginal rate of tax in this successful claim that such taxation offended Article 1 of the 1st Protocol (A1P1) – the peaceful enjoyment of possessions. But the very wealthy seeking to safeguard their bankers bonuses may not obtain too much comfort from the Strasbourg ruling, as the facts were fairly extraordinary.

The applicant had been a Hungarian civil servant for 30 years until her dismissal (with many others) in July 2011. Long-standing rules gave her 8 months severance pay. The 98% tax rate was introduced in 2010; it was then successfully challenged in the Hungarian Constitutional Court. On the day of the Court’s adverse judgment, the tax was re-enacted, but this time the 98% rate was applied to pay exceeding 3.5m forints – c. £10,000 – and, further, only where the earnings came out of specified categories of public sector employees.

A fresh challenge in the Constitutional Court annulled the retrospective effect of this law, but could not as a matter of jurisdiction review the substantive aspects of the tax. So the applicant went to Strasbourg to challenge the tax when deducted from her pay.

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Randy, rating, and his (house)boat

18 April 2013 by David Hart KC

Reeves v. Northrop, CA, 17 April 2013, – read judgment

Randy Northrop is a Californian and a wanderer in spirit. He lives with his family aboard MY Cannis – see the pic. He got fed up of “living in a grotty council house in a rough area” of Bristol, so bought and renovated this former Thames tug. And nice inside it sounds too – two open fireplaces, several flat screen TVs, a music room and grand piano.

He spent 8 years moored in Bristol, but the “authorities there aren’t too keen on “live-aboards.”” So he moved on and in 2008 ended up in North Devon moored off Chivenor.

How then did he have the misfortune to stray into one of the backwaters of the law – the law of council tax? Because, after featuring in the local paper, he made a generous offer “as a gesture of good citizenship” to pay some “voluntary” council tax. And instead of the authorities saying “how kind, than you very much” he got a “statement” saying that he was Band A – “fait accompli” as he rightly observed. But a po-faced response which did not indeed endear itself to Randy. Hence this challenge by him to the authorities’ decision.

Sounds a bit dry? Not at all. In the witty and elegant prose of Sir Alan Ward, even rating law is made interesting – and the retired Lord Justice pokes fun at the pompous verbiage you have to wade through to answer the question – do you have to pay council tax on a moored boat?

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Legal advice privilege should not extend to accountant’s advice, says Supreme Court

24 January 2013 by Rosalind English

Prudential plc and another , R (on the application of) v Special Commissioner for Income Tax and another [2013] UKSC 1 23 January 2013 – read judgment

The Supreme Court has ruled that legal advice privilege should only apply to advice given by a member of the legal profession; that this is what the common law has always meant, and that any wider interpretation would lead to uncertainty. Two strong dissents do not find any principled underpinning for the restriction of the privilege to advice from solicitors or barristers.

The following summary is based on the Supreme Court’s press release (numbers in square brackets denote paragraphs in the judgment).

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No removal of right of appeal without clear and express wording

1 November 2012 by Rosalind English

The Queen on the application of Totel Ltd v The First-Tier Tribunal (Tax Chamber) and The Commissioners for Her Majesty’s Revenue and Customs  [2012] EWCA Civ 1401 – read judgment

Tax litigation is not the most obvious hunting ground for human rights points but if claimants feel sufficiently pinched by what they perceive as unfair rules, there is nothing to stop them appealing to the courts’ scrutiny of the lawfulness of those rules.

Human rights were not raised per se in this appeal but constitutional principles which arguably play the same role made all the difference to the outcome.

This case concerned the removal of a right of appeal by an Order in Parliament that stopped the appellant company (T) in its tracks, so naturally it turned to judicial review to find a remedy that the tax tribunal was not prepared to grant. T prayed in aid a fundamental principle of our unwritten constitution set out in  R (Spath Holme Ltd) v Secretary of State for Transport, the Environment and Regions [2000] 2 WLR 15:

Parliament does not lightly take the exceptional course of delegating to the executive the power to amend primary legislation. When it does so the enabling power should be scrutinised, should not receive anything but a narrow and strict construction and any doubts about its scope should be resolved by a restrictive approach.[35]
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