A recent decision of the Guernsey Court of Appeal confirms the availability of judicial review to taxpayers in relation to a decision by the Director of Income Tax to issuing a notice in response to a TIEA request.

The Income Tax (Guernsey) Law 1975 provides that the recipient of a notice can appeal the decision to issue a notice but it does not provide a right for any other person (such as the taxpayer) to challenge the notice. In this case a taxpayer became aware that the Director had issued a notice to a local institution requiring that it produce documents concerning entities connected to the taxpayer. The institution was unwilling to exercise its right to appeal so the taxpayer sought permission to bring judicial review proceedings. At first instance the Judge held that the Director’s decision to issue the notice was not justiciable. However the Court of Appeal overturned this decision and held that judicial review was available to the taxpayer on the basis that a taxpayer or account holder would have a direct interest in ensuring that the power to issue the notice was exercised in accordance with the law.

In light of this decision, the recipient of a notice should consider whether to inform the taxpayer once it receives any such notice. If it does not inform the taxpayer and complies with the notice, it risks being criticised for complying with a potentially invalid notice. Ultimately to determine whether or not a notice is valid, a recipient is likely to want to engage with the taxpayer whose affairs are said to be under investigation.