Specific v. general legislation

- Presumption that more specific charging provision has priority

"[201] There is one further matter, however, which we should mention. As we have explained, it was part of HMRC's case before the UT that any charge to tax on Mr Hoey under the TOAA legislation would take priority over any liability to tax under the employment income provisions of ITEPA. The UT accepted this submission, and held that the FTT had erred in holding that it was not obliged to go on to consider the alternative assessments to tax under the TOAA provisions once it had held that Mr Hoey was liable under the income tax provisions. It was not at all clear to us on what basis HMRC contended that the TOAA charge to tax would take priority, and it would in our view be an extraordinary position to reach if it were indeed the case that the highly complex and potentially penal provisions of the TOAA code had logically to be considered first in any case involving employment income where they might potentially be engaged. Furthermore, such an approach would in all probability raise the unwelcome spectre of economic double taxation, potentially giving rise to concurrent liabilities arising out of the same transactions.

[202] While HMRC must of course form their own view on the matter, and it is not for the courts to be prescriptive on questions of policy, we respectfully suggest that it would generally be in accordance with the intentions of Parliament that the TOAA provisions should be kept in reserve for deployment in cases of tax avoidance which cannot effectively be countered in any other way. If, as in the present case, the transactions in question give rise to a straightforward liability to tax on employment income, that should normally be the end of the matter. It is fortunately unnecessary for us to say any more on the subject, however, because HMRC wisely conceded, at the beginning of the fourth day of the hearing, that the TOAA provisions do not have priority over the charge to tax on employment income under ITEPA, although they do have a role to play as a fallback head of charge. Ms Nathan also explicitly undertook on behalf of HMRC that they would seek not to impose a double charge to tax, in the event that both sets of provisions applied. She informed us that the precise mechanism to avoid the possibility of a double charge in such circumstances was a question of some complexity, which required the input of numerous stakeholders, but as we understood it the undertaking which she offered on behalf of her clients was in substance unqualified. The only question was precisely how it should be given effect.

[203] Beyond saying that we welcome this clarification and commend the willingness of HMRC to take appropriate steps to avoid the possibility of economic double taxation in cases of the present type, we are content to say no more on this aspect of the appeal." (Hoey v. HMRC [2022] EWCA Civ 656, Simler, Phillips, Henderson LJJ)

"[53] The question, put shortly, is whether s 743(5) is a charging provision in substitution for or in addition to that contained in s 739(2). I prefer the first alternative. It is true that it is unusual to find a charging provision in the final subsection of a section entitled: 'Supplemental provisions'. But as it deals specifically with the consequences of the actual receipt of benefit in my view it should be regarded as superseding the more general charging provision contained in s 739(2) unless there are clear words to the contrary. There are no such words. Moreover even in a penal section to tax a man on more than he actually received in cases where there is no power to enjoy apart from that actual receipt goes well beyond what Parliament is likely to have considered to be necessary for deterrent purposes. At least it would require even clearer words than are to be found in this legislation to make it plain that that is what Parliament did intend. The point does not arise for decision and I need say no more about it." (IRC v. Botnar [1999] STC 711, Morritt LJ)

- Presumption that specific provision not overridden by general provision

"[68] TMA 1970 also contains a number of time limits, including those in schedule 1AB. In some cases, those time limits are coupled with provisions enabling them to be extended. The UT suggested that in such cases the general effect of section 118(2) would cede to the conditions of the particular provision in question. That is a sensible reading of such provisions if it is assumed that section 118(2) has the general effect of extending time. However, it fails to take account of the improbability of specific time extension powers and a general time extension provision co-existing in the same enactment when the general provision contains no clear indication that it is indeed to take effect as a time extension provision. In other words, the presence of the specific provisions tells against section 118(2) having any time extension function at all. If section 118(2) had been intended to have this effect, it is likely in my judgment that it would have been clearly stated." (HMRC v. Raftopoulou [2018] EWCA Civ 818, David Richards LJ)

- Situation covered by specific provision supports it being outside the scope of another specific provision

"[59] In fact, however, there is a provision of FA 2004 which (unlike s.245) does remain operative and which provides additional support for the conclusion that I have reached, namely that s.1290 is not apt to cover unfunded arrangements such as the UURBS. This is s.246 FA 2004...

...

[62] The fact that s.246(1) FA 2004, a provision which continues in force, appears entirely apt to describe what occurred in this case provides further support for the conclusion that HMRC's attempt to read s.1290 as covering the circumstances of this case should be rejected. Parliament clearly intended s.246 to govern unfunded arrangements (that is, "non-contributory provision"), in contrast to what is now s.1290. The fact that s.246 does not apply where the benefits are taxable under Part 9 of ITEPA can only reflect a deliberate legislative choice." (A D Bly Groundworks and Civil Engineering Limited v. HMRC [2025] EWCA Civ 1443, Falk LJ)

- Specific tax charge does not militate against a broader charge applying

"[15]...the tax code is not a seamless garment. As a result provisions imposing specific tax charges do not necessarily militate against the existence of a more general charge to tax which may have priority over and supersede or qualify the specific charge.

[69] ...The specific provisions for the taxation of employment-related loans have the effect of deeming the benefit of the loans to be emoluments. But if, on a proper analysis, the sums paid into the Principal Trust are emoluments in the first place, these provisions cannot apply as otherwise the taxpayer would taxed twice on part of the same earnings." (RFC 2012 plc v. Advocate General for Scotland [2017] UKSC 45)

- Act governing liability takes precedence over management act

"[36] Having taken such care to walk the taxpayer through the process of giving effect to his entitlement as part of his tax liability for the year specified by him, it would seem extraordinary for that to be taken away, without any direct reference or signpost, by a provision in a relatively obscure Schedule of another statute concerned principally, not with liability, but with management of the tax. Section 1020 makes no specific reference to Schedule 1B, and in any event refers only to “information” in general terms, rather than anything likely to affect the substance of liability. By contrast sections 60(2) and 128(7) are more than mere “signposts”, as the judges below characterised them. The words “subject to” are substantive in effect, imposing a qualification on the right otherwise conferred by those provisions. Applying ordinary principles of interpretation, the absence of similar words in section 132 would naturally be taken as indicating that this right is not subject to the same qualification.

[37] Turning to the TMA, it is true that words of Schedule 1B taken on their own would be apt to apply to a claim under sections 132-133. However, I do not regard that as enough to displace the clear provisions of the ITA in respect of liability. I do not see this as turning so much on whether one set of provisions is more specific than the other, but rather on the fact that the ITA is in principle the governing statute in respect of tax liability, and as such should take precedence in the absence of any indication to the contrary. Further, unlike the judges below, I see a significant inconsistency between the two sets of provisions: the first gives the taxpayer an unqualified right to claim a deduction in the previous year; the second in effect removes that right by treating it as relating to the current year." (R (oao Derry) v. HMRC [2019] UKSC 19)

Specific v. general legislation