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HMRC internal manual

Excise Assessments Interim Guidance

Best judgement: what it means

The meaning of the phrase ‘to the best of their judgement’ and principles inherent in HMRC requirement to exercise best judgement were considered in a VAT High Court ruling given by Woolf J, as he was then, in the appeal case Van Boeckel v C & E QB Dec 1980, [1981] STC 290.

The case set the benchmark for best judgement. In summary, the principles adopted in Van Boeckel are that

  • HMRC should not be required to do the work of the taxpayer
  • HMRC must perform their function honestly and above-board
  • HMRC should fairly consider all the material before them and on that material, come to a decision which is reasonable and not arbitrary, and
  • there must be some material before HMRC on which they can base their judgement.

The basic principles have been refined in a number of other cases. In the case of CA McCourtie LON/92/191 the tribunal considered the principles set out in Van Boeckel and put forward three further propositions

  • the facts should be objectively gathered and intelligently interpreted
  • the calculations should be arithmetically sound, and
  • any sampling technique should be representative.