HMRC had concluded that profits arising from the oil trading business of Glencore Energy UK Limited ("Glencore") had been diverted to its parent company in Switzerland, Glencore International AG, so as to constitute "taxable diverted profits" and had issued a charging notice for £21.1 million (plus interest) of Diverted Profits Tax (DPT).
Glencore paid the tax demanded as required under the statute. Rather than using the statutory machinery in the DPT rules to dispute the imposition of the tax, which would have included a period of up to 12 months to await a review by a Designated Officer of HMRC, Glencore challenged the issue of the charging notice using judicial review. It alleged errors in the charging notice, including failure to consider representations made after the preliminary notice and irrationality in the calculation.
On 2 November, the Court of Appeal upheld the High Court's decision to refuse permission for judicial review in a case reported as (Glencore Energy UK Limited v HMRC)  EWCA Civ 1716.
The Court of Appeal followed the case of Re Preston  1 AC 835 in relation to the application of judicial review in tax cases. It confirmed that there must be exceptional circumstances involving an abuse of power. In the view of the Court, that principle is based on the fact that judicial review in the High Court is ordinarily a remedy of last resort, so as to ensure that the rule of law is respected where no other procedure is suitable to achieve that objective. The Court found that this was not the case here and that the issues could be dealt with under the DPT statutory procedure, which was a suitable alternative remedy.