UT/2024/000060 - [2025] UKUT 00143 (TCC)

Before addressing the individual grounds we remind ourselves of the general principles stemming from the nature of this claim as one of judicial review. In particular, we remind ourselves that the claim is not about whether HMRC’s decision (the Decision) is the one we would have reached. There are two bases on which we can interfere with the Decision. First, we can interfere where HMRC have gone wrong in law (including in the construction of the SP) in the Decision. This requires determination of the relevant point of law. Second, we can interfere if HMRC have made an error in the Decision which is susceptible to judicial review.

So far as the second basis is concerned, the law is explained by Lord Hodge DPSC and Lord Sales JSC in their joint judgment in R (Friends of the Earth Ltd and another) v Secretary of State for Transport [2020] UKSC 52, at [116] to [121].

A decision can be challenged where the decision-maker fails to take account of those considerations material to their task. This does not however mean any considerations. There are three categories of consideration:

A consideration which falls into the third category is not one which necessarily has to be taken into account. A consideration falling into the third category only has to be taken into account if it is so obviously material that it would be irrational to leave it out of account. Putting the matter another way, the consideration must be one which no reasonable decision-maker, in the position of the actual decision-maker and otherwise acting lawfully, could leave out of account.

It follows that where a consideration in the third category is left out of account, this will not affect the lawfulness of the decision unless the consideration is one which it would be irrational to leave out of account.

Where a consideration in the third category is taken into account by the decision-maker, the weight to be given to the consideration is a matter for the decision-maker, including a decision to give the consideration no weight at all. A decision to give the consideration no weight at all can only be challenged if it would be irrational to give the consideration no weight at all.

The concept of irrationality is discussed in the judgment of Lord Carnwath JSC in R (oao) Gallaher Group v CMA [2018] UKSC 25, specifically at [39] to [41]. The discussion confirms that this particular ground of review should be referred to as irrationality. As was identified in the oral submissions before us, irrationality refers to a decision which no reasonable decision-maker, in the position of the relevant decision-maker and otherwise acting lawfully, could have made.

What should also be noted are those challenges which are not included in the Grounds. No challenge is made on the basis of legitimate expectation, or on the basis of failure to give reasons, or on the basis that SP, on its own terms is unlawful. This is important because, as will be seen, some of the grounds on which judicial review is sought do not function in the absence of those sorts of challenges.