The Tax Code and its Administration - L2

Question 1

What does Article 4 of the Bill of Rights (1689) state about tax?

Answer 1

There can be no taxation except under the authority of an Act of Parliament.

Question 2

Which cases confirm that tax must be authorised by statute?

Answer 2

Bowles v Bank of England [1913], Woolwich Equitable Building Society v IRC [1993].

Question 3

Why is tax law called a statutory subject?

Answer 3

All tax rules are found in legislation.

Question 4

What is the Tax Law Rewrite?

Answer 4

A 1996 programme to simplify tax law by rewriting income and corporation tax codes without changing the rules.

Question 5

What is the Office of Tax Simplification?

Answer 5

A 2010 body created to propose simplifications, shut down in 2023.

Question 6

What case established purposive interpretation of tax statutes?

Answer 6

Pepper v Hart [1993].

Question 7

What limitation on purposive interpretation was stated in Gray’s Timber Products Ltd v R&C Comrs [2010]?

Answer 7

Taxpayer should not be taxed unless wording is clear.

Question 8

What does Lee argue about purposive interpretation in tax?

Answer 8

It is hard to apply due to ambiguous rules.

Question 9

Who is responsible for UK tax administration?

Answer 9

HMRC (His Majesty’s Revenue and Customs), created by CRCA 2005.

Question 10

What powers does HMRC have under CRCA 2005 (commissioners for revenues and customs act 2005)?

Answer 10

They can do anything necessary or conducive to their tax functions (s. 9).

Question 11

What is HMRC’s primary duty according to Vestey v IRC [1980]?

Answer 11

To collect tax, but with administrative common sense (e.g. not collecting tax that costs more to collect).

Question 12

How can taxpayers usually challenge a tax bill?

Answer 12

Through the statutory appeals process.

Question 13

When can judicial review be used instead of appeal?

Answer 13

If relying on HMRC’s incorrect advice would make tax collection an abuse of power (Re Preston [1985]).

Question 14

What cases show HMRC is bound by public advice and possibly private advice?

Answer 14

R v IRC, ex p MFK Underwriting Agents Ltd [1990]; Matrix-Securities Ltd [1994].

Question 15

What case shows HMRC conduct can create a binding belief?

Answer 15

R v IRC, ex p Unilever plc (1996).

Question 16

What condition did the Supreme Court set for HMRC advice to be binding?

Answer 16

It must be clear (R (Davies) v R&C Comrs [2011]).

Question 17

What is the rule about withdrawing HMRC guidance?

Answer 17

Must be done with reasonable notice and equivalent publicity (R (Cameron) v R&C Comrs [2012]).

Question 18

What are Extra-Statutory Concessions (ESCs)?

Answer 18

Public HMRC announcements not to collect full tax in some situations.

Question 19

Why are ESCs controversial?

Answer 19

They may go beyond HMRC’s powers and challenge the Rule of Law (Williams, Wilkinson case).

Question 20

How did the Finance Act 2008 address ESC concerns?

Answer 20

Allowed statutory authority for ESCs under s. 160.

Question 21

What is a back-tax agreement?

Answer 21

A contractual agreement to settle past tax liability without full investigation (IRC v Nuttall [1996]).

Question 22

What is a forward-tax agreement and is it lawful?

Answer 22

No, it’s unlawful (ultra vires) – Fayed v Advocate General for Scotland (2004).

Question 23

Can taxpayers sue HMRC for tort?

Answer 23

Generally no – HMRC has no tort liability for ordinary administrative errors (Neil Martin Ltd v HMRC [2007]).

Question 24

What concern did Goldberg raise in his article?

Answer 24

HMRC may bully taxpayers using purposive interpretation; calls for an informal tribunal to review fairness.

Question 25

What does Schwarz propose to protect taxpayers?

Answer 25

A taxpayer’s bill of rights and independent review of HMRC powers.

Question 26

What does O'Sullivan argue about HMRC tort immunity?

Answer 26

It leaves taxpayers vulnerable and should be changed by law.

Question 27

Why should cases and HMRC practice be mentioned after statutes?

Answer 27

They are interpretations or applications, not the primary source of law.

Question 28

How should a taxpayer begin a tax law explanation?

Answer 28

By identifying the relevant statute first.

Question 29

What does Article 4 of the Bill of Rights (1689) state regarding taxation?

Answer 29

There can be no taxation except under the authority of an Act of Parliament ## Footnote Interpreted in cases like Bowles v Bank of England [1913] and Woolwich Equitable Building Society v IRC [1993]

Question 30

What is the primary subject of tax law?

Answer 30

Tax law is a statutory subject ## Footnote All rules are found in the legislative tax code

Question 31

What is the significance of the complexity of the UK's tax code?

Answer 31

The UK has the longest tax code in the world, which has been criticized for its complexity ## Footnote Monroe warned in the 1970s that the impenetrability of the tax code had reached crisis point

Question 32

What was the purpose of the Tax Law Rewrite program established in 1996?

Answer 32

To simplify the income tax and corporation tax codes ## Footnote The program ended in 2010, but the rules remained basically the same

Question 33

What is HMRC?

Answer 33

His Majesty’s Revenue and Customs, the tax administration body ## Footnote Established by the Commissioners for Revenue and Customs Act 2005

Question 34

What is HMRC's primary statutory duty?

Answer 34

Collecting tax ## Footnote This duty is qualified by a discretion to exercise 'administrative common sense'

Question 35

True or False: HMRC can be sued for ordinary administrative errors.

Answer 35

False ## Footnote HMRC has no tort liability for ordinary administrative errors

Question 36

What is the modern approach to interpreting tax statutes according to Pepper v Hart?

Answer 36

Purpose prevails over literal meaning ## Footnote Courts aim to find the purpose behind the legislation

Question 37

What are extra-statutory concessions (ESCs)?

Answer 37

Public announcements by HMRC that they will not collect the full amount of tax in specified circumstances ## Footnote Criticized for potentially violating the Rule of Law

Question 38

What did the Supreme Court emphasize in R (Davies) v R&C Comrs regarding HMRC advice?

Answer 38

HMRC advice must be clear before it can bind them ## Footnote This emphasizes the need for clarity in HMRC's guidance

Question 39

Fill in the blank: The government closed the Office of Tax Simplification in _______.

Answer 39

2023

Question 40

What is the role of judicial review in the context of HMRC actions?

Answer 40

Allows taxpayers to challenge HMRC actions if they are deemed to be an abuse of power ## Footnote Used when a taxpayer relies on HMRC advice that later proves incorrect

Question 41

What is a back-tax agreement?

Answer 41

A contractual agreement to accept a sum in lieu of the taxpayer’s actual past tax liability ## Footnote Only for good administrative reasons

Question 42

What did the case Fayed v Advocate General for Scotland establish regarding forward tax agreements?

Answer 42

It is ultra vires for HMRC to make a forward tax agreement ## Footnote This means accepting payment of an estimated sum for future tax liabilities is unlawful

Question 43

According to Goldberg, what is a proposed solution to protect taxpayers from HMRC?

Answer 43

A new informal tribunal to investigate claims of unacceptable HMRC behavior ## Footnote This tribunal would include both lay and legal membership

Question 44

What does the term 'judicial review' imply in relation to HMRC?

Answer 44

A process by which taxpayers can challenge HMRC's decisions in court ## Footnote This typically occurs when other appeal processes are unavailable

Question 45

What is the outcome of the R v IRC, ex parte MFK Underwriting Agents Ltd case regarding taxpayer reliance on HMRC advice?

Answer 45

Taxpayers can seek judicial review if they relied on HMRC advice that later turned out to be incorrect ## Footnote This is especially relevant if the tax bill is considered an abuse of power

Question 46

What did the Finance Act 2008 s 160 allow regarding extra-statutory concessions?

Answer 46

Allowed for them to be given statutory authority ## Footnote This was in response to doubts about the lawfulness of some ESCs

Question 47

What are the limits of HMRC's power to grant extra-statutory concessions?

Answer 47

They are limited by the primary duty to collect tax ## Footnote This was emphasized in the R (Wilkinson) v IRC case