Steven Vaughan: Why Administrative Lawyers Should Pay attention to Tax

When I was thinking about leaving practice, my (then) future PhD supervisor told me that one of the great benefits of academia was the freedom to research whatever one liked. And to change research focus whenever one wanted. These both seemed attractive. Over time, however, I have come to realise that while both are theoretically possible, what we tend to do (in legal academia at least) is to stay in our lanes. It is unusual, for example, to find someone who researches Criminal Law and then decides to dabble in IP. Or someone who writes on both Banking Law and on Family Law. This is both a product of training (how a PhD can have a disciplining effect encouraging narrow specialisations) and of how many places operationalise career development (in that becoming known internationally for a single ‘thing’ is often valorised). One consequence is that we tend to mainly read things within our own areas of speciality. Well, I do at least. It is unlikely you will find me with a pile of Contract Law journal articles in my ‘Really Should Read These At Some Point’ folder. But I am now starting to think that that is a mistake. When we branch out, when we step outside our comfortable academic places and spaces, we are forced to take a hard look at things we once thought familiar. That is certainly what happened when I read Stephen Daly’s excellent new book, Tax Authority Advice and the Public (Hart 2020).

Daly’s monograph is concerned with the UK’s tax authority, Her Majesty’s Revenue and Customs (HMRC), and the “status of HRMC advice”. It is a book about the exercise of various forms of discretion by a public body in issuing norms whose legal status and purchase are not necessarily perfectly clear; what is often called ‘soft law’. These are norms which, while they may have significant practical effects, are usually said not to be binding. People can get rather touchy when you write and speak about ‘soft law’. It is a polarising term (and one which Daly largely avoids). But it’s also a useful catch-all for a diverse group of legal instruments which includes things like guidance, guidelines, circulars, protocols, standards (and so on) which have various functions (leading to various practical, and sometimes legal, impacts) but which do not have the same legally binding effects as hard law. As Rick Rawlings has observed, “soft law is a fact of public life” in England & Wales (‘Soft Law Never Dies’, in Mark Elliott and David Feldman (eds), The Cambridge Companion to Public Law (CUP 2015) 215); and there has been work in this jurisdiction, from the 1940s onwards, which has spoken to ‘bureaucratic (or administrative) rule making’, ‘administrative quasi-legislation’, and the like. These works consider the use of soft law, often set against concerns as to one or more of legality, transparency, accountability, and participation.

And this is where Daly’s book is both different and similar. It is an inch-by-inch account of HRMC practices in the giving of ‘advice’ and shows, I think, the potential of ‘slow scholarship’; of the possibilities from spending years immersed in one research question. Daly argues that HMRC advice is “desirable by reason of the rule of law” (because such allows taxpayers to make choices as to the potential tax consequences of their actions) but that such desirability is subject to caveats. Here, Daly offers up a “normative framework” with “five benchmarks” – these are familiar administrative law and regulation/governance ideas, but in different coats: “correctness, clarity, accessibility, scrutiny and reliability”. The current HMRC system shows, he argues, “shortcomings” when modelled against this framework. Like a grandfather clock, this sort of meticulous work (close, careful analysis of HMRC advice) can be admired both for its intricacy (the individual cogs and their placement) and for the sounds they make and the things they cause us to reflect on.

The book raises good examples (Chapter 3) from case law, other scholarship, and HMRC practices of some of the fudging that happens when people (policy makers, judges, and academics) write about soft law. That is, of the sort of fudging that goes, ‘This body can’t make law, so the norms it issues can’t be law, but they can have practical effects which might have some legal bearing once ex post facto conclusively granted such by a court’. Think here about the current pandemic and the confusion that has been engendered (in the UK and elsewhere) between ‘rules’ and ‘advice’; where my favourite example is UK government (prescriptive-sounding) guidance on 2-metre social-distancing which is then followed by the line: This is not a rule’. What I also liked about this book is that it does not fall into the trap, of which many of those who write about soft law are guilty, of belabouring the potential for misuse. Too many soft law accounts are often about procedural problems and only rarely offer up examples of substance. Daly comes at the provision of HMRC guidance from a more positive angle: “Even where not necessary for the rule of law to be given effect, the provision of assistance [via advice] will still be desirable given that such assistance will advance the rule of law by detailing the legal consequences of action” (Daly, 44).

Another positive of Daly’s work is that it is trying to do quite different things at the same time: to say that HMRC advice is constitutionally distinct and significant (that is, that “a system for providing advice is desirable by virtue of the rule of law” (Daly, 41)); and also that that advice (and its constitutional significance) can tell us something broader about the nature of administrative law and public administration. I’d be keen for a bigger debate on these: are there particular areas of law (and/or particular regulators?) where (because of who they are; maybe because of potential infringement with certain (human) rights) we think the giving of advice is both more acceptable (and also possibly more open to problems)? Here, I am wondering what mileage there is in taking some of the ideas and thinking from work on ‘super-statutes’ and asking if there is such a thing as ‘super-guidance’? Is there something qualitatively different about the DPP not issuing guidance on how it would exercise its discretion in relation to assisted suicide cases (the Purday case, which Daly draws on) and (to give a random example) a local authority issuing or not issuing guidance about how a local parking permit scheme will operate? Is HMRC (which “occupies a curious space in the state” (Daly, 84)) more important (for whatever flavour and value of ‘important’) than (say) Arts Council England and so we think it more desirable and/or more appropriate for HMRC to promulgate advice than Arts Council England?

That Daly’s work can both say and do something substantive for tax law and tax law scholars, while also causing others, like me, who research much further afield, to sit back and pause is a testament both to the crafting that has gone into the text and also to the universality of the big-ticket issues it addresses: power, law, and discretion. Maybe this means I need to be reading a lot more tax scholarship…

Steven Vaughan, Professor of Law, UCL Faculty of Laws

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