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HMRC internal manual

Admin Law Manual

Collection and Management: Case law

The Wilkinson case

Section 5 of CRCA gives HMRC certain discretionary powers in the collection of the taxes for which it is responsible. How and when that discretion can be exercised is not set out in statute, but is determined by case law. The most important case concerning collection and management powers is R ex parte Wilkinson v the Commissioners of Inland Revenue in the Court of Appeal in 2003.

Mr Wilkinson was a widower who wanted the Inland Revenue to extend widows’ bereavement allowance to widowers. The allowance was available to widows under the Income and Corporation Taxes Act 1988, but not to widowers, and Mr Wilkinson wanted the Revenue to extend the allowance to widowers by concession.

Mr Wilkinson lost the case and in their judgement the judges laid down the circumstances in which the Commissioners can exercise discretion in the application of the law.

In his judgement, Lord Phillips quoted with approval the words of Lord Scarman in the National Federation of Self-Employed and Small Businesses case in 1982.

Lord Scarman said

“..the board are charged by statute with the care, management and collection on behalf of the Crown [of these taxes]. In the exercise of these functions, the board have managerial discretion as to the best means of obtaining for the national exchequer the highest net return that is practicable having regard to the staff available to them and the cost of collection.”

Lord Phillips added

“No doubt, when interpreting tax legislation, it is open to the Commissioners to be as purposive as the most pro-active judge in attempting to ensure that effect is given to the intention of Parliament and that anomalies and injustices are avoided. But we do not see how section 1 of the TMA can authorise the Commissioners to announce that they will deliberately refrain from collecting taxes that Parliament has unequivocally decreed shall be paid [just] because the Commissioners take the view that it is objectionable that the taxpayer should have to pay the taxes in question”.