R v Inland Revenue Commissioners, ex parte National Federation of Self-Employed and Small Businesses Ltd [1982] AC 617 (HL)

Facts

• The Inland Revenue made an arrangement with casual workers in the Fleet Street newspaper industry, allowing payment of tax on part of their income and ceasing investigations into previous underpayments.
• The National Federation of Self-Employed, representing taxpayers outside Fleet Street, objected to the agreement, alleging it resulted in unfair treatment and loss of tax revenue impacting taxpayers generally.
• The Federation applied for judicial review, seeking to challenge the Inland Revenue’s agreement.

Issues

1. Whether the National Federation of Self-Employed had locus standi (sufficient interest) to challenge the Inland Revenue’s agreement.
2. Whether general objections to tax administration, absent a specific and personal effect on the claimant, were sufficient to establish standing.
3. Whether loss to public funds or broad impact on taxpayers generally could grant standing in judicial review proceedings.

Decision

• The House of Lords rejected the Federation’s application for judicial review.
• It was held that the Federation did not have locus standi because it could not demonstrate any specific and personal effect on its members resulting from the Inland Revenue’s agreement.
• The arrangement with Fleet Street workers did not alter the rights, duties, or legal positions of other taxpayers.
• Broad disagreements with government policy, including issues involving public funds, were deemed insufficient to establish standing.
• The Court affirmed the need for a direct connection between the claimant and the challenged decision.

Legal Principles

• Locus standi in judicial review requires a claimant to show a sufficient and particular interest or direct connection to the matter being challenged.
• The “direct connection” or “sufficient interest” test focuses on whether the claimant is personally affected by the decision beyond a general concern or public interest.
• General allegations of unfairness or harm to public funds do not suffice for standing.
• The distinction between direct and indirect effects is central; only clear and specific ties to the challenged decision can establish locus standi.
• Taxpayer standing is limited; objections based solely on alleged harm to public funds or generalized grievances are inadequate.
• These principles have been confirmed and applied in subsequent cases, such as R v Secretary of State for the Environment, ex p. Rose Theatre Trust Co. [1990] 1 QB 504.

Conclusion

The decision in R v IRC, ex p. National Federation of Self-Employed restricts taxpayer standing in administrative law, establishing that only those with a direct and personal effect from a public body’s decision may seek judicial review. This “direct connection” test remains a central standard, ensuring that courts only entertain challenges from claimants with demonstrable, specific interest.