The number of taxpayers seeking to challenge HMRC decisions through a judicial review has jumped by 31% in a year, as individuals and businesses become more willing to contest HMRC’s increasingly tough approach towards recouping tax receipts, says Pinsent Masons, the international law firm. Figures show that there were 51 applications for a judicial review against HMRC in 2012 (the most recent date for which data are available) – up from 39 in 2011. In previous recent years, the number has remained static (see graph below). Pinsent Masons’ head of tax Jason Collins commented: ‘Judicial review is a remedy of last resort, so this significant jump in the number of applications shows just how contentious some of HMRC’s decisions have become. Although not all of these disputes will progress all the way to a full judicial review hearing, this surge in challenges reflects taxpayers’ reaction to the increasingly aggressive stance taken by HMRC to increase its tax take and clamp down on tax avoidance and evasion. The problem is that what HMRC sees as tax avoidance, many businesses legitimately see as sensible business planning. With so much money now at stake as HMRC tries to plug the tax gap and help reduce the deficit in the public finances, there’s far more incentive for taxpayers who feel they have not been treated fairly not to give up without a fight.’
