Change of Position and the Revenue

Abstract

This article examines three defences potentially available to the Inland Revenue after it has spent taxes received pursuant to ultra vires legislation – the defence of estoppel, ministerial receipt, and change of position. It concludes that the change of position defence is the most viable option for the Revenue in tax recovery cases. The article proceeds to consider whether allowing the Revenue to rely on the change of position defence is compatible with English and EU law. Having weighed the principles in favour and against the defence, it concludes that the defence should be available to the Revenue in appropriate circumstances.Finally, this article critically analyses each element of the change of position defence under English law, and proposes a modified version of it that arguably strikes a better balance between competing considerations.