A5.303 Judicial review—the duty to act fairly
The courts have stated that HMRC's general duties of 'care and management' impose an implied duty 'owed by [HMRC] to the general body of the taxpayers to treat taxpayers fairly, to use their discretionary powers so that, subject to the requirements of good management, discrimination between one group of taxpayers and another does not arise'1. Taxpayers have primarily sought to rely on this duty to challenge decisions by HMRC on two grounds:
• firstly, they have argued that HMRC is acting unlawfully in seeking to collect tax from them, because prior representations or practice or conduct made it unfair for HMRC to seek to collect the tax; and
• secondly, they have sought to challenge decisions by HMRC on the basis that they are being unfairly discriminated against.
Frequently, claimants may seek to rely on an overlap of these considerations, so some of the cases referred to in each of the sections below could have been also considered in the other.
Past representations, practice or conduct
The first attempt to rely on HMRC's duty to act fairly to challenge a decision to assess tax occurred in Preston v IRC2. In that case the taxpayer sought to challenge the Revenue's decision to enforce assessments on the basis that the decision breached an earlier agreement settling the taxpayer's liabilities. Lord Templeman observed that3, 'the commissioners may decide to abstain from exercising their powers and performing their duties on grounds of unfairness, but the commissioners themselves must bear
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