Lloyd v McMahon, 1 All ER 1118, 1987 UKHL
Citation:Lloyd v McMahon, 1 All ER 1118, 1987 UKHL
Rule of thumb:If a person is being repeatedly inspected by HMRC for tax audits, can this be stopped? Yes, the same people cannot be targeted, however, it will be difficult to prove that the targeting is unfair, and impossible to argue if wrongdoing is found. In addition to a person having the right to challenge whether an auditor has fairly and properly calculated the amount of tax they may have underpaid, if a person is unfairly targeted for a tax audit, then this decision can also be challenged and damages obtained for the inconvenience of the audit, although this will be a fairly difficult case to prove.
Rule of thumb:In carrying out the public services, does the duty to enquire have to be the same and extensive in every case? No, this case is famous for saying that reasonable enquiries by the public sector do not have to be the same in every case.
Background facts:
The facts of this case were that citizens had been audited by the local council regarding tax, and fined. They tried to judicially review for them to be selected to be audited – and sought to argue that they had been maliciously targeted rather than randomly targeted which was unfair.
Judgment:
The Court held that the tax audit was conducted properly in the circumstances of this case.
Ratio-decidendi:
’In the circumstances, it would be quite unreasonable and not in accordance with the intendment of the enactment to hold that the court, where an issue is raised as to the fairness of the procedure adopted by the auditor, is confined to a judicial review species of jurisdiction so as to have power only to quash or affirm the auditor’s certificate without entering upon its own examination of the merits of the case. No doubt there may be cases where the procedural defect is so gross, and the prejudice suffered by the appellant so extreme, that it would be appropriate to quash the auditor’s decision on that ground. But in my opinion the court has a discretion, where it considers that justice can properly be done by its own investigation of the merits, to follow that course.’ Lord Keith
‘the rules of natural justice are not engraved on tablets of stone". Lord Bridge
Warning: This is not professional legal advice. This is not professional legal education advice. Please obtain professional guidance before embarking on any legal course of action. This is just an interpretation of a Judgment by persons of legal insight & varying levels of legal specialism, experience & expertise. Please read the Judgment yourself and form your own interpretation of it with professional assistance.