Partner payment notices requiring tax payment prior to dispute resolutions were lawful


Re: Rowe & Ors v Commissioners for HM Revenue & Customs [2015] EWHC 2293 (Admin)

The claimants are or were members of a tax avoidance scheme, which was currently the subject of a substantive dispute over whether the scheme achieved the results contended. HMRC was of the view that it did not, and thus issued partner payment notices (PPN) requiring the payment of tax pending the outcome of the dispute.

The PPN were issued pursuant to a statutory scheme that changed the presumption of where tax sits pending the outcome of a dispute over the lawfulness of tax avoidance schemes. The claimants challenged the issuing of the PPNs on a number of grounds.

The Court held that the scheme did not breach natural justice by not make provision for broader representations or a right of appeal. It considered that the measures were not final, and that judicial review was available. It also dismissed arguments that the scheme did not comply with the statutory conditions. In addition, the Court found that there had been no legitimate expectation established in relation to payment obligations, there was no irrationality in the exercise of discretion and the scheme did not breach ECHR, art 6 or art 1 Protocol 1, which did not apply to tax liability.

Jessica Simor QC was involved in this case.