Judgment summary
This case concerned an application by Mr Robin Houldsworth to stay his tax appeal before the First-tier Tribunal pending the outcome of a related judicial review claim before the High Court. HMRC objected to the stay and had itself applied to the High Court to stay the judicial review pending the tax appeal (1, 2).
The Tribunal noted it had no power to stay the judicial review, so the only question before it was whether to stay the tax appeal (4). Both parties agreed it was undesirable for the two proceedings to run in parallel given the overlap in facts (3).
After considering the case law on staying proceedings where tax appeals and judicial review overlap, the Tribunal refused the application to stay the tax appeal, concluding that the appeal should proceed first (27, 42, 43).
Background
HMRC issued a closure notice to Mr Houldsworth on 8 June 2018 concluding he was UK resident during the year ended 5 April 2005 (the "Relevant Tax Year") and chargeable to tax on dividends of £1,309,500, with additional tax of £323,528.32 (5(a)).
Mr Houldsworth appealed, out of time, by a Notice of Appeal dated 22 January 2020, which HMRC did not object to (5(b)). His amended grounds comprised: Ground 1 (no valid closure notice under section 8A Taxes Management Act 1970), Ground 2 (not UK tax resident as a matter of law), and Ground 3 (legitimate expectation based on HMRC's published guidance IR20 paragraph 2.2) (5(b)).
Ground 1 was withdrawn on 17 January 2023, and Ground 3 was struck out by the Tribunal on 13 March 2024 ([2024] UKFTT 224 (TC)) (5(c), 5(d)). The appeal continues on Ground 2 only (5(e)).
On 4 November 2025, the High Court granted Mr Houldsworth permission, out of time, to bring a judicial review ([2025] EWHC 2848) on three grounds relating to legitimate expectation, unreasonableness and abuse of power concerning HMRC's refusal to apply IR20 guidance (5(f)). HMRC did not attend the permission hearing and no directions were made on sequencing of the two sets of proceedings (5(f)).
The parties disputed several underlying facts, including when Mr Houldsworth's Swiss employment began, the extent of his UK activities and directorships, his days spent in the UK and Switzerland, and the nature of his connections with each country (8, 9, 10).
Core dispute
The central question was whether the Tribunal should exercise its discretion under Rule 5(3)(j) of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009 to stay the Tax Appeal pending determination of the Judicial Review, or whether the Tax Appeal should proceed first.
Mr Houldsworth argued that the Judicial Review involved narrower factual issues under IR20 paragraph 2.2, that its outcome would materially assist the Tax Appeal, that determining the Tax Appeal first risked pre-empting the Judicial Review, and that judicial comity required a stay given the High Court's grant of permission (25).
HMRC argued that there was substantial factual overlap between the two proceedings, that the Tribunal was the appropriate specialist forum to resolve disputed facts, that findings in the Tax Appeal would assist the High Court, and that proceeding with the Tax Appeal first avoided duplication and inconsistent findings (26).
Court findings
The Tribunal found that there were substantial disputed questions of fact common to both proceedings, including when Mr Houldsworth's Swiss employment began, the extent of his continuing UK activities, and the nature of his connections with Switzerland (30, 33, 34).
Unlike in Davies, where the claimant was not seeking factual findings or oral evidence in the judicial review, the disputed facts here were central to both the Tax Appeal and the Judicial Review grounds (30). The Tribunal considered Daniel, Hankinson and Lower Mill Estate more analogous than Davies, supporting the proposition that substantial factual disputes should ordinarily be resolved by the specialist tribunal first (30, 37).
The Tribunal was not persuaded that the Judicial Review's factual inquiry was materially narrower than that required for the Tax Appeal, nor that Mr Houldsworth could quantify any cost saving from proceeding with the Judicial Review first (31, 33, 34).
The Tribunal held that if Mr Houldsworth succeeded in the Tax Appeal, this would dispose of the need for the Judicial Review, and even if unsuccessful, the Tribunal's findings of fact would likely materially assist the High Court (38). It found that determination of the Tax Appeal first had greater potential to resolve or narrow the dispute than the reverse (38).
The Tribunal rejected the argument based on judicial comity, holding that the grant of permission for judicial review concerned only the existence of an arguable case, not sequencing between the two forums, and that the High Court had not given any express direction on sequencing (39, 41).
Outcome
The application to stay the Tax Appeal was refused (27, 42). The Tribunal concluded that the balance of expediency and the overriding objective favoured allowing the Tax Appeal to proceed before the Judicial Review (38, 43).
Major issues / areas of contention
- Whether the Tribunal had power to stay the Judicial Review (it did not) (4).
- Whether the Tribunal should stay the Tax Appeal pending the Judicial Review under Rule 5(3)(j) of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009 (1, 11).
- Whether the outcome of the Judicial Review would provide material assistance to the Tax Appeal, or vice versa (15, 25(a), 36).
- Whether there were substantial disputed facts common to both the Tax Appeal and the Judicial Review, including the date Mr Houldsworth's Swiss employment began and the extent of his UK connections (30, 33, 34).
- Whether IR20 paragraph 2.2 required a narrower factual inquiry than the domestic law residence test, and whether this favoured hearing the Judicial Review first (25(b), 33, 35).
- Whether proceeding with the Tax Appeal first would pre-empt or create an obstacle to the Judicial Review, applying principles from Davies (16, 37).
- Whether the principle of judicial comity required the Tribunal to stay the Tax Appeal given the High Court's grant of permission for judicial review (25(e), 39-41).
- Application of the overriding objective under Rule 2 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009, including use of the Tribunal's specialist expertise (12, 30, 43).