TC09548 - [2025] UKFTT 00700 (TC)

Under the heading “Duty to give reasons”, I said:

“A failure to give reasons can be a breach of HMRC’s public law duty. In HMRC v Bupa Purchasing [2007] EWCA Civ 542 (“Bupa Purchasing”), Arden LJ, giving the only judgment with which Auld and May LJJ both agreed, said at [31] that the Commissioners “accept that there have to be reasons as a matter of public law, and that they would be subject to judicial review if reasons were not given”. At [44] she recorded:

“It is common ground that as a matter of public law the Commissioners must provide the basis on which they make an assessment. In other words, they must supplement the assessment with a notification of the reasons. But this duty is grounded in public law, and not in the statute.”

She also considered why there was no requirement in the relevant statute for HMRC to give reasons (the statutory provision was VATA s 73). She said at [46]:

“VATA makes no reference to the obligations of the Commissioners under public law to give reasons as such for an assessment under s 73(1). There may be good reasons for this. First, it is unnecessary for Parliament to set out a duty grounded in public law. Secondly, to set it out in the statute might well preclude the courts from developing it further. Thirdly, if it is included in a statute the taxpayer may obtain additional remedies over and above those to which he is entitled under public law. In other words, there may well be good reasons why Parliament should not wish to put the public law duties of the Commissioners into s 73(1).”

Relevantly, s 73(1) requires that any assessment made by HMRC be ‘to the best of their judgement’; the position is the same in relation to assessments under Reg 80 of the PAYE Regs.”