Aubrey Weis v Commissioners for HM Revenue and Customs

Mr Justice Sheldon :

1. I am considering a renewed application for judicial review brought by the Claimant, Aubrey Weis, against the decision of His Majesty’s Revenue and Customs (“HMRC”) to issue a series of ‘closure notices’ for the years between 2005-2013 and uphold them on statutory review on 17 November 2021. The conclusion of the statutory review was that Mr Weis was domiciled in the United Kingdom and not Israel, with the effect that his non-United Kingdom source income would be subject to United Kingdom tax for the relevant tax years.

2. Permission to pursue this judicial review claim was refused on the papers by Jay J. The primary reason given was that the claim was brought substantially out of time and there was no good reason to extend time. Jay J also stated for completeness that the judicial review claim, which was based on the public law principle of legitimate expectation, was unarguable.

3. I have to consider whether to extend time, and whether to grant permission for the Claimant to proceed with his judicial review claim. Background

4. As set out in the Statement of Facts and Grounds for the judicial review, the Claimant contends that correspondence from the predecessor to HMRC (which for convenience I will refer to as HMRC ) – especially a letter dated 27 November 2000 – as well as subsequent actions by HMRC, gave rise to a substantive legitimate expectation that HMRC would continue to treat him as if he was not-domiciled in the United Kingdom (but in Israel) and would not charge him tax retrospectively on a different domicile basis if HMRC changed their view as to his domicile.

5. In the letter of 27 November 2000, HMRC informed the Claimant’s agent that: “I have now completed my enquiries into your client's claim to be not domiciled in the UK made on the form DOM1 dated 17 January 2000. I have decided that no amendment to the claim is needed. . . .”. The claim referred to in the latter sentence was to the Claimant’s tax return for the year ending April 1999. In the DOM1 form (‘Income and Chargeable Gains – Domicile’), the Claimant stated that he considered that he was domiciled in Israel and that he intended to retire to Israel on completion of his business activities in the United Kingdom.

6. In reliance on the assurance provided in 2000, the Claimant contends that he filed his subsequent tax returns on the basis that he was not domiciled in the United Kingdom, and planned his financial affairs accordingly, in particular by making offshore investments which would not be taxable on the remittance basis. The Claimant contends that this assurance was amplified by other conduct of HMRC, which I refer to below.

7. The Claimant contends that it was not until a meeting in February 2013 that HMRC first stated that they would no longer abide by the ruling given in 2000, and that HMRC intended to challenge his domicile retrospectively and without giving any notice or warning of their change in position.

8. The closure notices were issued on 10 May 2019. The Claimant appealed against the closure notices on 4 June 2019 and he requested statutory reviews against those notices on 4 July 2021. In the statutory review, the Claimant raised the legitimate expectation argument, but this was not considered by HMRC. In a letter dated 17 November 2021, HMRC concluded that the closure notices should be upheld and stated that: “I note your comments in your letter dated 4 July 2021 regarding whether Legitimate expectation applies in this case. Please be advised that I have not considered this in my review as an evaluation of HMRC conduct is not within the scope of a statutory review.”

9. On 20 December 2021, the Claimant’s appeal against the closure notices was notified to the First Tier Tribunal (Tax Chamber) (“the FTT”). In the meantime, on 4 June 2021, the Claimant had made a formal complaint to HMRC (a tier 1 complaint) under HMRC’s internal complaints process. In his complaint, the Claimant raised the legitimate expectation issue arising from the letter of 27 November 2000 and other matters. On 5 October 2021, HMRC rejected the complaint at tier 1. HMRC stated that no legitimate expectation had been created. On 20 December 2021, the Claimant requested that the complaint be considered as a tier 2 complaint. The Claimant included with his complaint a copy of a legal opinion from tax counsel which supported his claim that a legitimate expectation had been created. The tier 2 complaint was rejected by HMRC on 11 May 2022.

10. On 8 August 2022 (within 3 months of the conclusion of the tier 2 complaint), the Claimant’s agent, a firm of accountants Lopian Gross Barnett (LGB), made a complaint to the Adjudicator’s Office (“the AO”).

11. According to the “Service Level Agreement for the provision of adjudication services for HM Revenue and Customs and Valuation Office Agency by the Adjudicator’s Office” (“the SLA”), the Adjudicator is an officeholder, external to HMRC with the independent personal authority to review complaints about HMRC. The AO is made up of staff who are employees of HMRC. Paragraph 5.10 of the SLA provides that: “The Adjudicator and AO can look at complaints about all the following: - mistakes - unreasonable delays - poor or misleading advice - processes - including those surrounding an individual ADR - whether a policy has been followed - inappropriate staff behaviour - the use of discretion (subject to next paragraph) If a complaint involves how HMRC has used its discretion, the Adjudicator and AO will consider the process relating to the exercise of discretion, but will not be entitled to substitute their judgement for a reasonable judgement reached by HMRC”.

12. Paragraph 5.11 of the SLA provides that the Adjudicator and AO may decide that “compensation is appropriate”. Paragraph 5.12 of the SLA provides that the Adjudicator and AO cannot look at certain complaints, including “matters which have been considered on appeal by independent tribunals or issues that the courts could have considered or could consider”.

13. In the Summary Grounds lodged by HMRC, it is said that the AO responded to the letter of complaint made by LGB on 10 August 2022, enclosing an authorisation to act form. LGB have claimed that they never received this letter. According to the AO, in the absence of any response to its letter, the complaint was closed without sending any further correspondence either to LGB or to the Claimant.

14. The Claimant instructed the firm of solicitors, Farrer & Co LLP, to chase up what had happened to the complaint made to the AO. Correspondence was sent by Farrer & Co LLP to the AO on 19 March 2024. The AO replied the following day to say that it was unable to communicate without an authorisation to act form. This form was duly completed by the Claimant and returned to the AO. On 10 May 2024, the AO wrote to Farrer & Co LLP to say that it would not review the complaint because the file had been closed. The judicial review proceedings were brought within one month of that decision.

15. In the meantime, the Claimant and HMRC had entered into an ADR process. I have little information about that process. The following mention is made in the Summary Grounds: “On 4 April 2023, the appointed mediator wrote to the Claimant’s representatives (in the context of the Claimant not participating in ADR planned for 14 March 2023 due to his ill health and having submitted a new application for ADR) saying, “… I cannot keep a dispute in ADR or accept a dispute into ADR when the customer is unable to take part in the process … When your client is able to proceed, please contact me; there is no need to submit a new application for ADR. In the meantime, your current application is not accepted and so the dispute is not currently within ADR. ”. There was no contact between the Claimant’s representatives and the mediator after April 2023”.

16. The Summary Grounds also refer to a letter from Farrer & Co LLP to the AO dated 24 May 2024. This states that the advice of counsel in May 2023 was that “it would not be worthwhile or advisable to chase the [AO] whilst actively pursuing Alternative Dispute Resolution”. It would appear, therefore, that a deliberate decision was made by the Claimant not to chase up the AO. I also note that, at no point, did the Claimant intimate to the HMRC that he would be issuing judicial review proceedings if his complaint was rejected; and no protective claim was issued.

17. On 21 March 2025, the FTT (see [2025] UKFTT 00348 (TC) ) determined the Claimant’s substantive appeal against the income tax charges being made during the tax years 2005/06 and 2007/08 to 2015/16. In their judgment, the FTT noted that the total of the adjustments to tax made by HMRC for those years is £6,322,880.69. (The tax payable under the closure notices that are the subject of the judicial review claim amounts to around £3,600,000). The FTT decided that the Claimant had acquired a domicile of choice in England before 2005/06. Submissions

18. The Claimant, represented by Ben Elliott, submits that there is a good reason for the Court to extend time to pursue the judicial review claim, and that permission should be granted. Mr Elliott claims that throughout the period following the conclusion of the statutory review, the Claimant has been pursuing an alternative remedy: the complaints procedure and then the referral to the AO, as well as Alternative Dispute Resolution (“ADR”). The referral to the AO was said by Mr Elliott to be a suitable alternative remedy as the SLA indicated that matters similar to a complaint about legitimate expectation could be considered and, in any event, the alternative remedy need not be co-extensive with the issues that could be considered by the Administrative Court or the remedies available to that court, relying on R (Zahid) v University of Manchester [2017] EWHC 188 (Admin) , and R (Cowl) v Plymouth City Council [2002] 1 WLR 803 .

19. Mr Elliott contends that even though the Claimant had not explicitly indicated an intention to bring judicial review proceedings against HMRC, HMRC were on notice at all times that the decisions in question were under challenge, and that the Claimant was raising the question of legitimate expectation.

20. Mr Elliott acknowledged that the Claimant had not chased up the AO to see what was happening to his complaint, but contended that there was no obligation on him to do so. Mr Elliott also noted that the Claimant had suffered from ill health during this time. Mr Elliott recognised that the Claimant was thereby taking a risk that any subsequent judicial review claim might be faced with the argument that he had not acted promptly, but he submitted that there was no prejudice to HMRC nor was there any detriment to good administration. First, HMRC was always aware of the legitimate expectation point. Second, the judicial review proceedings would always have been stayed behind the appeal to the FTT as that appeal concerned not only the period covered by the legitimate expectation, but also a number of further tax years.

21. Mr Elliott submitted that the legitimate expectation claim was at least arguable and merited investigation at a substantive hearing. The purpose of the DOM1 procedure was for a taxpayer to seek a ruling from HMRC so as to provide them with assurance as to their domicile so that they could plan their affairs accordingly. It was not contemplated that a taxpayer would be required to submit a DOM1 every year, unless there had been a material change of circumstances, and so reliance could be placed on the DOM1 ruling for subsequent years. It was recognised, however, that the value of the ruling would diminish over time.

22. Mr Elliott further submitted that in addition to the fact that the DOM1 amounted to HMRC giving the Claimant a clear unambiguous and unqualified ruling as to his domicile, HMRC subsequently confirmed that this ruling was being abided by. For instance, when inquiries were opened by HMRC, they focused on remittances, and that would only arise if the Claimant was regarded as domiciled outside of the United Kingdom. In 2009, having been referred to the DOM1, HMRC accepted that they had no further enquiries in relation to the Claimant’s domicile for the tax year 2007/08. In 2009, HMRC stated that the Claimant’s son’s domicile was Israel (and not the United Kingdom) for the years under enquiry on the basis of the Claimant’s domicile.

23. Mr Elliott also referred to the detriment that the Claimant had suffered because he had, based on HMRC’s assurance and subsequent conduct, chosen to hold funds offshore on the basis that he could generate interest free of United Kingdom tax. Had the Claimant understood that his domicile was being questioned he would have been able to bring the funds onshore and generate higher returns. The Claimant had also incurred fees by keeping his funds offshore, and had also been deprived of the opportunity to make charitable contributions to offset tax liabilities. The evidence before the Court is that the Claimant has made substantial charitable contributions.

24. Mr Elliott dismissed the suggestion that the legitimate expectation could be frustrated by the fact that the FTT had found that tax was payable by the Claimant (the decision of the FTT was not being appealed): legitimate expectation was relied upon in circumstances where tax would otherwise be payable. Furthermore, there was nothing in the FTT’s decision that indicated the Claimant had not completed the DOM1 application in good faith. Whilst it was accepted that additional information could have been provided, that was not deliberately omitted by the Claimant.

25. HMRC were represented by Christopher Stone KC. He submitted that the Court should follow the approach of Jay J when considering the application for permission on the papers. There was no good reason to extend time and there was no arguable case to justify permission in any event. There was prejudice to HMRC as a result of the very long delay in bringing the claim. Further, Mr Stone KC submitted that had the judicial review proceedings been lodged they would have taken precedence over the FTT process and would have been dealt with some time ago.

26. Mr Stone KC contended that no satisfactory explanation had been provided for the very substantial delay. Indeed, there were substantial periods of time when no alternative remedy was being pursued by the Claimant: two years between the issue of the closure notices and the tier 1 complaint; three months between the response by HMRC to the tier 2 complaint and the submission to the AO; and then the 11 month period between the mediator’s email saying that the dispute was not in ADR and the letter from Farrer & Co LLP to the AO. No explanation had been provided for the inactivity.

27. Furthermore, Mr Stone KC submitted that the referral to the AO was not a suitable alternative remedy for the Claimant to be pursuing as the AO could not consider a complaint about legitimate expectation. This was reflected in the SLA, and also in the AO’s guidance. Case study 4 of the AO’s guidance refers to a complaint made by a taxpayer that they were entitled to recover professional costs (for accountants and lawyers) incurred after HMRC had concluded that the taxpayer had incorrectly reported whether VAT was payable on some projects that they had undertaken. HMRC had accepted on review that the taxpayer could rely on a legitimate expectation based on HMRC’s previous written advice and agreed to reimburse around £44,000 in costs. The taxpayer referred the matter to the AO on the basis that the reimbursement was far too low: over £300,000 of costs had been incurred. The AO concluded that HMRC had made a mistake in their response to the earlier complaint by the taxpayer and that additional costs should have been reimbursed. In the guidance, the AO expressly stated that: “We have no remit to consider the merits of a claim of legitimate expectation as that is a matter for the Court. Our role was to consider whether HMRC addressed the claim for costs in a reasonable way”.

28. Mr Stone KC also contended that the issues raised in the judicial review were not of importance for the public at large and did not require consideration of fundamental rights. Further, that the claim for legitimate expectation was a weak one. The letter from HMRC in 2000 was not clear, unambiguous and devoid of relevant qualification, referring to R v IRC, ex parte MFK Underwriting Agents Ltd [1990] 1 WLR 1545 , at 1569. In any event, it only related to the tax year in question and not subsequent years. Furthermore, to establish a legitimate expectation, the Claimant had to have placed all his cards upwards on the table when completing the DOM1 form and he had not done so. Reliance was placed on a number of findings by the FTT as to what had taken place.

29. For example, Mr Stone KC referred to the Claimant’s answer to question 15 in the DOM1 form, which asked the Claimant to state what periods he had spent in the United Kingdom during each of the past 10 years, to which he replied: “Majority of time in United Kingdom due to business connections”. What the Claimant did not mention, however, was that in the early 1990s, the Claimant had founded a religious community which was located in the property next to his (which he had purchased for that purpose), and of which he was the leader, and that this role took up a significant amount of his time. The legal framework for an extension of time

30. The Administrative Court Guide 2025 provides at paragraph 6.4.4.2 that: “In considering whether to grant an extension of time, the Court must first determine the date from which the relevant time period started to run so that the period of delay can be calculated correctly. The Court will then consider all the circumstances, including whether an adequate explanation has been given for the delay, the importance of the issues, the prospects of success and whether an extension will cause substantial hardship or prejudice to the defendant or any other party or be detrimental to good administration.”

31. The footnote to this paragraph in the Guide refers to the Privy Council decision of Maharaj v National Energy Corporation of Trinidad and Tobago [2019] 1 WLR 983 , where Lord Lloyd-Jones observed at [38] that: “Here it is important to emphasise that the statutory test is not one of good reason for delay but the broader test of good reason for extending time. This will be likely to bring in many considerations beyond those relevant to an objectively good reason for the delay, including the importance of the issues, the prospect of success, the presence or absence of prejudice or detriment to good administration, and the public interest.”

32. In Maharaj at [47], Lord Lloyd-Jones stated that: “While prejudice or detriment will normally be important considerations in deciding whether to extend time, there will undoubtedly be circumstances in which leave may properly be refused despite their absence. One example might be where a long delay was wholly lacking in excuse and the claim was a very poor and inconsequential one on the merits, such that there was no good reason to grant an extension”. Discussion

33. In my judgment, the date from which time begins to run for the judicial review claim was the date of the closure notices: 10 May 2019. That was the date which triggered the claim for judicial review: it is the substantive decision that is under challenge. However, given that it was entirely reasonable for the Claimant to have sought a statutory review of that decision before lodging judicial review proceedings, I will examine the period after the conclusion of the statutory review on 17 December 2021 until the issue of the claim form on 11 June 2024 (over 30 months later) to see whether the further period of delay was excusable or not.

34. In my judgment, the further period of delay was not “wholly lacking in excuse”. The Claimant pursued the internal review process with HMRC which involved direct consideration of his claim that he had a legitimate expectation that he would continue to be treated as being domiciled in Israel until HMRC reached a different conclusion as to his domicile, and that HMRC would not apply that different conclusion retrospectively. The internal review concluded on 11 May 2022. Thereafter, on 8 August 2022, the Claimant made a referral to the AO.

35. On the basis of the materials that I have seen, I do not consider that the referral was a suitable alternative remedy for the Claimant to have pursued in the sense that it would have justified a stay of any judicial review proceedings. It seems clear from the remit of the Adjudicator under the SLA, as illustrated by Case Study 4 in the guidance, that the Adjudicator could not consider whether or not the Claimant had a legitimate expectation. This was a matter that would and could be addressed by the Administrative Court.

36. Whilst the case law referred to by Mr Elliott on the question of suitable alternative remedy does say that a stay should ordinarily be granted “if a significant part of the issues between the parties could be resolved outside the litigation process” (see Cowl at [14], per Lord Woolf CJ), it was not realistic to expect that the main issue between the parties – whether the Claimant had a legitimate expectation, such that the closure notices should not have been made at all – would or could have been resolved by the Adjudicator.

37. Nevertheless, the fact that a reference was made to the AO does show that the Claimant did not simply sit on his hands throughout the period after the conclusion of the internal review on 11 May 2022, and he was continuing to assert his reliance on the legitimate expectation throughout. Furthermore, although I do not know much about the ADR process that the parties engaged in, it is likely that that would have covered the tax payable by the Claimant during the periods covered by the relevant closure notices, and therefore embraced the period covered by the asserted legitimate expectation.

38. There was clearly a delay, however, following the ending of the ADR process which appears to have been in early April 2023 until the lodging of the judicial review proceedings 14 months later in June 2024. From that time, the Claimant did not chase up the AO to find out what was happening to his referral (even if that had been a suitable alternative remedy, which I have found it was not), and this seems to have been a deliberate act on his behalf. Whilst there is no specific obligation on a judicial review claimant to check with a decision maker as to what is happening, there is a risk that this will be considered by a Court when looking at the issue of delay. The obligation under CPR 54.5(1) is for a claim form to be filed “promptly”, and in any event not later than 3 months after the grounds to make the claim first arose.

39. I consider, therefore, that there was an unjustified delay in this case for a period of 14 months: following the end of the ADR process. This, however, is not the end of the matter. As was made clear in Maharaj , the question for the Court is not whether there was a good reason for the delay, but whether there is a good reason to extend time. This involves consideration of the importance of the issues, the prospect of success, the presence or absence of prejudice or detriment to good administration, and the public interest. In my judgment, there is a good reason to extend time.

40. First , I consider that the issues raised by the Claimant are important. They are not issues that are of significant public interest as they essentially turn on the specific treatment of the Claimant and do not involve wider policy issues. Nevertheless, the issues are not trivial to the Claimant. To the contrary, they involve an obligation to pay tax of around £3,600,000. This is a substantial sum to any person.

41. Second , I consider that the issues in this case are clearly arguable. There is, in my judgment, a realistic prospect of success. The Claimant’s claim for legitimate expectation does not turn simply on the letter of 27 November 2000. It also involves the subsequent conduct and statements of HMRC. The statements and conduct were arguably clear, unambiguous and devoid of relevant qualification. Furthermore, at all relevant times, the Claimant was under the impression from his dealings with HMRC that his domicile was being treated as Israel and not the United Kingdom, and the Claimant clearly relied on that impression in the way that he conducted his financial affairs.

42. Whether or not the claim for legitimate expectation ultimately succeeds will turn on a careful consideration of the statements and conduct made by HMRC, the way in which the Claimant conducted himself as a result, as well as whether or not he put all of his cards face up on the table when he filled out the DOM1 form. In my judgment, the merits of the case is not clear-cut for either party.

43. Third , there is no real prejudice or detriment to good administration caused by the delay. At all material times, HMRC was aware of the legitimate expectation point being raised by the Claimant. It has not come as a surprise to HMRC, even though protective proceedings were not issued and a judicial review claim was not specifically intimated. There is no suggestion that, for instance, the delay in bringing these proceedings affects the evidence that is available to deal with the claim.

44. Moreover, it is highly unlikely that the judicial review proceedings would have progressed in any significant way until the FTT had reached its decision on the underlying question of domicile. Whilst it would have been possible for judicial review proceedings to have gone ahead prior to the appeal to the FTT, that is not realistic. As Mr Elliott pointed out in argument, the appeal to the FTT covered not just the tax years relevant to the judicial review claim but subsequent years as well. Accordingly, even if the judicial review proceedings had concluded in the Claimant’s favour there would still have been a need to proceed with the appeal. On the other hand, if the appeal to the FTT had concluded in the Claimant’s favour, there would have been no need for the judicial review proceedings.

45. In my judgment, therefore, even if the Claimant had lodged judicial proceedings sooner than he did on 11 June 2024, including within a short period after the end of the ADR in April 2023, the substantive hearing of any application for judicial review would not have been heard until after the FTT had concluded its appeal. That did not occur until 21 March 2025. HMRC is not, therefore, in a materially worse position in having to deal with the Claimant’s judicial review claim now than it would have been in had the claim being issued more promptly. Conclusion

46. For these reasons, therefore, I extend time to bring the proceedings for judicial review. I also grant permission as, for the reasons set out at paragraphs 41-2 above, the claim is plainly arguable.

47. The Court considers that this case can be cited as an authority for future cases given that it contains detailed consideration of an application to extend time.